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Abstract Previous work using logistic regression suggests that cognitive control‐related frontoparietal activation in early psychosis can predict symptomatic improvement after 1 year of coordinated specialty care with 66% accuracy. Here, we evaluated the ability of six machine learning (ML) algorithms and deep learning (DL) to predict “Improver” status (>20% improvement on Brief Psychiatric Rating Scale [BPRS] total score at 1‐year follow‐up vs. baseline) and continuous change in BPRS score using the same functional magnetic resonance imaging‐based features (frontoparietal activations during the AX‐continuous performance task) in the same sample (individuals with either schizophrenia (n =65, 49M/16F, mean age 20.8 years) or Type I bipolar disorder (n= 17, 9M/8F, mean age 21.6 years)). 138 healthy controls were included as a reference group. “Shallow” ML methods included Naive Bayes, support vector machine, K Star, AdaBoost, J48 decision tree, and random forest. DL included an explainable artificial intelligence (XAI) procedure for understanding results. The best overall performances (70% accuracy for the binary outcome and root mean square error = 9.47 for the continuous outcome) were achieved using DL. XAI revealed left DLPFC activation was the strongest feature used to make binary classification decisions, with a classification activation threshold (adjusted beta = .017) intermediate to the healthy control mean (adjusted beta = .15, 95% CI = −0.02 to 0.31) and patient mean (adjusted beta = −.13, 95% CI = −0.37 to 0.11). Our results suggest DL is more powerful than shallow ML methods for predicting symptomatic improvement. The left DLPFC may be a functional target for future biomarker development as its activation was particularly important for predicting improvement.