Atypical (second-generation) antipsychotics are considered standard treatment for children and adolescents with early-onset schizophrenia and schizoaffective disorder. However, the superiority of second-generation antipsychotics over first-generation antipsychotics has not been demonstrated. This study compared the efficacy and safety of two second-generation antipsychotics (olanzapine and risperidone) with a first-generation antipsychotic (molindone) in the treatment of early-onset schizophrenia and schizoaffective disorder. This double-blind multisite trial randomly assigned pediatric patients with early-onset schizophrenia and schizoaffective disorder to treatment with either olanzapine (2.5–20 mg/day), risperidone (0.5–6 mg/day), or molindone (10–140 mg/day, plus 1 mg/day of benztropine) for 8 weeks. The primary outcome was response to treatment, defined as a Clinical Global Impression (CGI) improvement score of 1 or 2 and ≥20% reduction in Positive and Negative Syndrome Scale (PANSS) total score after 8 weeks of treatment. In total, 119 youth were randomly assigned to treatment. Of these subjects, 116 received at least one dose of treatment and thus were available for analysis. No significant differences were found among treatment groups in response rates (molindone: 50%; olanzapine: 34%; risperidone: 46%) or magnitude of symptom reduction. Olanzapine and risperidone were associated with significantly greater weight gain. Olanzapine showed the greatest risk of weight gain and significant increases in fasting cholesterol, low density lipoprotein, insulin, and liver transaminase levels. Molindone led to more self-reports of akathisia. Risperidone and olanzapine did not demonstrate superior efficacy over molindone for treating early-onset schizophrenia and schizoaffective disorder. Adverse effects were frequent but differed among medications. The results question the nearly exclusive use of second-generation antipsychotics to treat early-onset schizophrenia and schizoaffective disorder. The safety findings related to weight gain and metabolic problems raise important public health concerns, given the widespread use of second-generation antipsychotics in youth for nonpsychotic disorders.