OBJECTIVE: Psychotic experiences are common in children and adolescents and are associated with concurrent and subsequent psychopathology. Most findings originate from general population studies, whereas little is known of the clinical outcomes of psychotic experiences in children and adolescents at familial high risk of psychosis. We examined the prevalence of psychotic experiences in middle childhood and whether early childhood psychotic experiences and developmental pathways of psychotic experiences predicted mental disorders in middle childhood in children at familial high risk of schizophrenia (FHR-SZ), bipolar disorder (FHR-BP), and a population-based control group. METHODS: In a longitudinal population-based cohort study children at FHR-SZ (N=170), FHR-BP (N=103), and the control group (N=174) were assessed for psychotic experiences and axis I disorders with face-to-face interviews in early and middle childhood (at 7 and 11 years of age). RESULTS: Psychotic experiences were more prevalent in children at FHR-SZ (31.8%, odds ratio 2.1, 95% CI 1.3-3.4) than in the control group (18.4%) in middle childhood. Early childhood psychotic experiences predicted mental disorders in middle childhood after adjusting for early childhood disorders and familial risk (odds ratio 2.0, 95% CI 1.2-3.1). Having three or more psychotic experiences increased odds the most (odds ratio 2.5, 95% CI 1.1-5.7). Persistent psychotic experiences were associated with increased odds of middle childhood disorders (odds ratio 4.1, 95% CI 2.1-8.4). Psychotic experiences were nondifferentially associated with mental disorders across the three familial risk groups. CONCLUSIONS: Early childhood psychotic experiences predict mental disorders in middle childhood. Psychotic experiences index vulnerability for psychopathology nondifferentially in children at familial high risk and the control group. Psychotic experiences should be included in mental health screenings including children at familial high risk.