Multiple lines of inquiry demonstrate alterations to immune function in psychosis. Clinically, this is reflected by elevated proinflammatory cytokines in serum, indicating activation of circulating immune cells. Data from isolated cells in clinical populations support the presence of altered activity of pertinent intracellular signaling pathways. Here, we focus on the well-characterized IFN-γ mediated JAK-STAT1 signaling pathway, which is involved in multiple aspects of immunity, including activation of circulating immune cells to a proinflammatory phenotype. By measuring a transcriptional signature characteristic of activation of this pathway, we demonstrate that JAK-STAT1 signature gene expression is suppressed in participants with psychosis who are early in illness and in participants who are hospitalized with an acute exacerbation of psychosis. Furthermore, we find that this expression signature normalizes in participants who have a longer illness duration and chronic, but not acute, psychopathology. This relationship of JAK-STAT1 signature gene expression with clinical characteristics highlights the temporal and contextual complexity of alterations to immune activity in psychosis and provides important insight into the functional state of circulating immune cells. These findings are of particular interest given recent research illustrating the importance of peripherally derived immune cells and the effectors they secrete in mediating neurophysiological processes of relevance for psychiatric illness.