PREPARE creates a prepared statement. A prepared statement is a server-side object that can be used to optimize performance. When the PREPARE statement is executed, the specified statement is parsed, analyzed, and rewritten. When an EXECUTE command is subsequently issued, the prepared statement is planned and executed. This division of labor avoids repetitive parse analysis work, while allowing the execution plan to depend on the specific parameter values supplied.

Prepared statements can take parameters: values that are substituted into the statement when it is executed. When creating the prepared statement, refer to parameters by position, using $1, $2, etc. A corresponding list of parameter data types can optionally be specified. When a parameter's data type is not specified or is declared as unknown, the type is inferred from the context in which the parameter is used (if possible). When executing the statement, specify the actual values for these parameters in the EXECUTE statement. Refer to EXECUTE for more information about that.

Prepared statements only last for the duration of the current database session. When the session ends, the prepared statement is forgotten, so it must be recreated before being used again. This also means that a single prepared statement cannot be used by multiple simultaneous database clients; however, each client can create their own prepared statement to use. Prepared statements can be manually cleaned up using the DEALLOCATE command.

Prepared statements have the largest performance advantage when a single session is being used to execute a large number of similar statements. The performance difference will be particularly significant if the statements are complex to plan or rewrite, for example, if the query involves a join of many tables or requires the application of several rules. If the statement is relatively simple to plan and rewrite but relatively expensive to execute, the performance advantage of prepared statements will be less noticeable.