Prospective studies have suggested genetic variation in the neuregulin 1 (NRG1) and D-amino-acid oxidase activator (DAOA) genes may assist in differentiating high-risk individuals who will or will not transition to psychosis. In a prospective cohort (follow-up=2.4-14.9 years) of 225 individuals at ultra-high risk (UHR) for psychosis, we assessed haplotype-tagging single-nucleotide polymorphisms (htSNPs) spanning NRG1 and DAOA for their association with transition to psychosis, using Cox regression analysis. Two NRG1 htSNPs (rs12155594 and rs4281084) predicted transition to psychosis. Carriers of the rs12155594 T/T or T/C genotype had a 2.34 (95% confidence interval (CI)=1.37-4.00) times greater risk of transition compared with C/C carriers. For every rs4281084 A-allele the risk of transition increased by 1.55 (95% CI=1.05-2.27). For every additional rs4281084-A and/or rs12155594-T allele carried the risk increased ∼1.5-fold, with 71.4% of those carrying a combination of ≥3 of these alleles transitioning to psychosis. None of the assessed DAOA htSNPs were associated with transition. Our findings suggest NRG1 genetic variation may improve our ability to identify UHR individuals at risk for transition to psychosis.