Accumulating evidence points towards the antipsychotic potential of cannabidiol. However, the neurocognitive mechanisms underlying the antipsychotic effect of cannabidiol remain unclear. We investigated this in a double-blind, placebo-controlled, parallel-arm study. We investigated 33 antipsychotic-naïve subjects at clinical high risk for psychosis (CHR) randomised to 600 mg oral cannabidiol or placebo and compared them with 19 healthy controls. We used the monetary incentive delay task while participants underwent fMRI to study reward processing, known to be abnormal in psychosis. Reward and loss anticipation phases were combined to examine a motivational salience condition and compared with neutral condition. We observed abnormal activation in the left insula/parietal operculum in CHR participants given placebo compared to healthy controls associated with premature action initiation. Insular activation correlated with both positive psychotic symptoms and salience perception, as indexed by difference in reaction time between salient and neutral stimuli conditions. CBD attenuated the increased activation in the left insula/parietal operculum and was associated with overall slowing of reaction time, suggesting a possible mechanism for its putative antipsychotic effect by normalising motivational salience and moderating motor response.