Sleep dysfunction is a pervasive symptom in schizophrenia, yet little is known regarding the extent to which problematic sleep is present prior to illness onset. Results from an online database search targeting genetic high-risk, clinical high-risk, and retrospective studies of patients with schizophrenia prior to onset suggest that abnormalities in sleep dysfunction precede schizophrenia onset. Further, a host of proximal factors such as neural structures, endocrine function, and cognitive performance holds promise for improving our conceptualization of sleep dysfunction. However, support is preliminary, and extensive new research in this area is essential. Drawing from this review, a neurodevelopmental diathesis–stress model is posited to highlight potential research targets and mechanisms through which vulnerability, biological/psychosocial stress, and adolescent neuromaturational factors may contribute to both sleep dysfunction and development of psychosis in at-risk youth.