Early patient-centered interventions can improve mental health and prevent psychotic relapse in people with recent-onset psychosis (ROP). However, limited effective peer-facilitated early interventions are found worldwide. We aimed to test the effects of a four-month peer-facilitated self-management intervention (PFSMI) for Chinese patients with ROP compared with a psychoeducation group (PEG) and treatment-as-usual (TAU) group. A randomized controlled trial was conducted at six Integrated Community Centers for Mental Wellness in Hong Kong. The primary outcome was level of recovery. Secondary outcomes were improvement of problem-solving ability, insight into illness/treatment, and functioning, and reducing psychotic symptoms and re-hospitalization rates. Overall, 180 ROP patients were randomly selected, and after collecting baseline data, randomly assigned to the PFSMI, PEG or TAU (60 per group). Their outcomes were measured at 1-week and 6-month post-intervention. One hundred and sixty-one patients (89.4 %) completed their interventions, with an overall attrition rate of 7.8 % (n = 14). Based on intention-to-treat principle, results of generalized estimating equation test indicated that the PFSMI group reported significantly greater improvements in levels of recovery, functioning and insight into illness/treatment and reductions in psychotic symptoms and duration of re-hospitalizations (p = 0.0007–0.02, with moderate to large effect sizes) than the TAU group at 1-week post-intervention, and both the TAU and PEG at 6-month post-intervention. Significantly fewer PFSMI participants were hospitalized than the TAU and PEG over 6-month follow-up (p = 0.003). The findings support that PFSMI can produce medium-term positive effects on the mental health and functioning of patients with ROP.