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The role of polyunsaturated fatty acids and their metabolites for the cause and treatment of psychotic disorders are widely discussed. The efficacy as an augmenting agent in chronic schizophrenia seems to be small or not present, however epidemiological data, as well as some recent controlled studies in emerging psychosis point towards possible preventive effects of long-chain polyunsaturated fatty acids in early and very early stages of psychotic disorders and some potential secondary or tertiary beneficial long-term effects in later, more chronic stages, in particular for metabolic or extra-pyramidal side effects. In this comprehensive review, we describe the physiology and metabolism of polyunsaturated fatty acids, phospholipases, epidemiological evidence and the effect of these fatty acids on the brain and neurodevelopment. Furthermore, we examine the available evidence in indicated prevention in emerging psychosis, monotherapy, add-on therapy and tolerability. The neuroprotective potential of n-3 LC-PUFAs for indicated prevention, i.e. delaying transition to psychosis in high-risk populations needs to be further explored.