Background: Due to prior emphasis on clinical recovery in Schizophrenia Spectrum Disorder (SSD), improving social functioning (SF) was oftentimes neglected, with ⩽15% of patients achieving social recovery. Priorly, we and others have shown that life-course factors, including childhood adversities, play a role in the occurrence and severity of postmorbid SF impairments, highlighting the need to understand these factors for effective interventions. Aim: This study investigates the mechanisms influencing SF in SSD and examines the causal roles of childhood trauma, premorbid adjustment, perceived stigma, self-esteem, and quality of life. Methods: This longitudinal study utilized data of 1,057 SSD patients, with measures at baseline, 3 and 6-year follow-up, from the Genetic Risk and Outcome of Psychosis cohort, to unravel the causal mechanism underlying SF utilizing Structural Equation Modeling. Determinants were assessed using validated retrospective and self-report questionnaires. Model development and testing involved a multistage process, encompassing relationships exploration, fit evaluation and model comparison. Results: We developed a probable causal model. Impaired premorbid adjustment emerged as a crucial factor, exerting negative influence on long-term SF, with a direct effect of β = −.252, p < .001 on SF at 3-year follow-up and β = −.056, p = .073 at 6-year follow-up. Childhood trauma exhibited a negative direct effect on SF at 3-year follow-up (β = −.087, p = .039), while demonstrating a substantial carry-over, indirect effect. Elevated perceived stigma negatively affected SF at 3-year follow-up (β = −.112, p = .008). The model explained 9.9% of SF variation at the 3-year follow-up and 54.3% at the 6-year follow-up. Conclusions: While validation is necessary, we found a foundational basis for causal interpretation. Premorbid adjustment, childhood trauma, and perceived stigma are essential life-course factors shaping postmorbid SF in SSD. We recommend interventions covering both prevention and treatment for individuals with established symptoms—addressing childhood trauma, premorbid adjustment, and perceived stigma—to enhance long-term social outcomes and offer actionable insights for clinicians.