Psychotherapies that may be helpful in delusional disorder include individual psychotherapy, cognitive-behavioral therapy (CBT), and family therapy.

Medications for schizophrenia are often used, especially when positive symptoms are present. Both first-generation antipsychotics and second-generation antipsychotics may be useful. Cognitive behavioral therapy has also been used.

A challenge in the treatment of delusional disorders is that most patients have limited insight, and do not acknowledge that there is a problem. Most patients are treated as out-patients, although hospitalization may be required in some cases if there is a risk of harm to self or others. Individual psychotherapy is recommended rather than group psychotherapy, as patients are often quite suspicious and sensitive. Antipsychotics are not well tested in delusional disorder, but they do not seem to work very well, and often have no effect on the core delusional belief. Antipsychotics may be more useful in managing agitation that can accompany delusional disorder. Until further evidence is found, it seems reasonable to offer treatments which have efficacy in other psychotic disorders.

Psychotherapy for patients with delusional disorder can include cognitive therapy which is conducted with the use of empathy. During the process, the therapist can ask hypothetical questions in a form of therapeutic Socratic questioning. This therapy has been mostly studied in patients with the persecutory type. The combination of pharmacotherapy with cognitive therapy integrates treating the possible underlying biological problems and decreasing the symptoms with psychotherapy as well. Psychotherapy has been said to be the most useful form of treatment because of the trust formed in a patient and therapist relationship.

Supportive therapy has also been shown to be helpful. Its goal is to facilitate treatment adherence and provide education about the illness and its treatment.

Furthermore, providing social skills training has helped many persons. It can promote interpersonal competence as well as confidence and comfort when interacting with those individuals perceived as a threat.

Insight-oriented therapy is rarely indicated or contraindicated; yet there are reports of successful treatment. Its goals are to develop therapeutic alliance, containment of projected feelings of hatred, impotence, and badness; measured interpretation as well as the development of a sense of creative doubt in the internal perception of the world. The latter requires empathy with the patient's defensive position.

According to the Mayo Clinic, it is best to start receiving treatment for paranoid schizophrenia as early as possible and to maintain the treatment throughout life. Continuing treatment will help keep the serious symptoms under control and allow the person to lead a more fulfilling life. This illness is typically unpreventable.

It has a strong hereditary component with a first degree parent or sibling. There is some possibility that there are environmental influences including "prenatal exposure to a viral infection, low oxygen levels during birth (from prolonged labor or premature birth), exposure to a virus during infancy, early parental loss or separation, and verbal, physical or sexual abuse in childhood". Eliminating any of these factors could help reduce an individual's future risk of developing paranoid schizophrenia.

Paranoid schizophrenia is an illness that typically requires lifelong treatment with neuroleptics to allow someone to have a relatively stable and normal lifestyle. In order to be successfully treated, a person with schizophrenia should seek help from family or primary care doctors, psychiatrists, psychotherapists, pharmacists, family members, case workers, psychiatric nurses, or social workers, provided he or she is not unable to do so, due to many people with schizophrenia having the inability to accept their condition. Non-compliance with neuroleptics may also occur if the patient considers the side effects (such as extrapyramidal symptoms) to be more debilitating than the condition itself. The main options that are offered for the treatment of paranoid schizophrenia are the following: neuroleptics, psychotherapy, hospitalization, electroconvulsive therapy, and vocational skills training.

There are many different types of disorders that have similar symptoms to paranoid schizophrenia. There are tests that psychiatrists perform to achieve a correct diagnosis. They include "psychiatric evaluation, in which the doctor or psychiatrist will ask a series of questions about the patient's symptoms, psychiatric history, and family history of mental health problems; medical history and exam, in which the doctor will ask about one's personal and family health history and will also perform a complete physical examination to check for medical issues that could be causing or contributing to the problem; laboratory tests in which the doctor will order simple blood and urine tests can rule out other medical causes of symptoms".

There are side effects associated with antipsychotic medication. Neuroleptics can cause high blood pressure and high cholesterol. Many people who take them exhibit weight gain and have a higher risk of developing diabetes.

The evidence for the effectiveness of early interventions to prevent psychosis appeared inconclusive. Whilst early intervention in those with a psychotic episode might improve short term outcomes, little benefit was seen from these measures after five years. However, there is evidence that cognitive behavioral therapy (CBT) may reduce the risk of becoming psychotic in those at high risk, and in 2014 the UK National Institute for Health and Care Excellence (NICE) recommended preventive CBT for people at risk of psychosis.

The treatment of psychosis depends on the specific diagnosis (such as schizophrenia, bipolar disorder or substance intoxication). The first-line psychiatric treatment for many psychotic disorders is antipsychotic medication, which can reduce the positive symptoms of psychosis in about 7 to 14 days.

The choice of which antipsychotic to use is based on benefits, risks, and costs. It is debatable whether, as a class, typical or atypical antipsychotics are better. Tentative evidence supports that amisulpride, olanzapine, risperidone and clozapine may be more effective for positive symptoms but result in more side effects. Typical antipsychotics have equal drop-out and symptom relapse rates to atypicals when used at low to moderate dosages. There is a good response in 40–50%, a partial response in 30–40%, and treatment resistance (failure of symptoms to respond satisfactorily after six weeks to two or three different antipsychotics) in 20% of people. Clozapine is an effective treatment for those who respond poorly to other drugs ("treatment-resistant" or "refractory" schizophrenia), but it has the potentially serious side effect of agranulocytosis (lowered white blood cell count) in less than 4% of people.

Most people on antipsychotics get side effects. People on typical antipsychotics tend to have a higher rate of extrapyramidal side effects while some atypicals are associated with considerable weight gain, diabetes and risk of metabolic syndrome; this is most pronounced with olanzapine, while risperidone and quetiapine are also associated with weight gain. Risperidone has a similar rate of extrapyramidal symptoms to haloperidol.

A paranoid reaction may be caused from a decline in brain circulation as a result of high blood pressure or hardening of the arterial walls.

Drug-induced paranoia, associated with amphetamines, methamphetamine and similar stimulants has much in common with schizophrenic paranoia; the relationship has been under investigation since 2012. Drug-induced paranoia has a better prognosis than schizophrenic paranoia once the drug has been removed. For further information, see Stimulant psychosis and Substance-induced psychosis.

Based on data obtained by the Dutch NEMISIS project in 2005, there was an association between impaired hearing and the onset of symptoms of psychosis, which was based on a five-year follow up. Some older studies have actually declared that a state of paranoia can be produced in patients that were under a hypnotic state of deafness. This idea however generated much skepticism during its time.

Social circumstances appear to be highly influential on paranoid beliefs. Based on data collected by means of a mental health survey distributed to residents of Ciudad Juárez, Chihuahua (in Mexico) and El Paso, Texas (in the United States), paranoid beliefs seem to be associated with feelings of powerlessness and victimization, enhanced by social situations. Potential causes of these effects included a sense of believing in external control, and mistrust which can be strengthened by lower socioeconomic status. Those living in a lower socioeconomic status may feel less in control of their own lives. In addition, this study explains that females have the tendency to believe in external control at a higher rate than males, potentially making females more susceptible to mistrust and the effects of socioeconomic status on paranoia.

Emanuel Messinger reports that surveys have revealed that those exhibiting paranoia can evolve from parental relationships and dis-trustworthy environments. These environments could include being very disciplinary, stringent, and unstable. It was even noted that, "indulging and pampering (thereby impressing the child that he is something special and warrants special privileges)," can be contributing backgrounds. Experiences likely to enhance or manifest the symptoms of paranoia include increased rates of disappointment, stress, and a hopeless state of mind.

Discrimination has also been reported as a potential predictor of paranoid delusions. Such reports that paranoia seemed to appear more in older patients who had experienced higher levels of discrimination throughout their lives. In addition to this it has been noted that immigrants are quite susceptible to forms of psychosis. This could be due to the aforementioned effects of discriminatory events and humiliation.

In patients suffering from schizophrenia, grandiose and religious delusions are found to be the least susceptible to cognitive behavioral interventions. Cognitive behavioral intervention is a form of psychological therapy, initially used for depression, but currently used for a variety of different mental disorders, in hope of providing relief from distress and disability. During therapy, grandiose delusions were linked to patients' underlying beliefs by using inference chaining. Some examples of interventions performed to improve the patient's state were focus on specific themes, clarification of neologisms, and thought linkage. During thought linkage, the patient is asked repeatedly by the therapist to explain his/her jumps in thought from one subject to a completely different one.

Patients suffering from mental disorders that experience grandiose delusions have been found to have a lower risk of having suicidal thoughts and attempts.

Grandiose delusions (GD), delusions of grandeur, expansive delusions also known as megalomania are a subtype of delusion that occur in patients suffering from a wide range of psychiatric diseases, including two-thirds of patients in manic state of bipolar disorder, half of those with schizophrenia, patients with the grandiose subtype of delusional disorder, and a substantial portion of those with substance abuse disorders. GDs are characterized by fantastical beliefs that one is famous, omnipotent, wealthy, or otherwise very powerful. The delusions are generally fantastic and typically have a religious, science fictional, or supernatural theme. There is a relative lack of research into GD, in contrast to persecutory delusions and auditory hallucinations. About 10% of healthy people experience grandiose thoughts but do not meet full criteria for a diagnosis of GD.

Delusional disorders are uncommon in psychiatric practice, though this may be an underestimation due to the fact that those afflicted lack insight and thus avoid psychiatric assessment. The prevalence of this condition stands at about 24 to 30 cases per 100,000 people while 0.7 to 3.0 new cases per 100,000 people are reported every year. Delusional disorder accounts for 1–2% of admissions to inpatient mental health facilities. The incidence of first admissions for delusional disorder is lower, from 0.001–0.003%.

Delusional disorder tends to appear in middle to late adult life, and for the most part first admissions to hospital for delusional disorder occur between age 33 and 55. It is more common in women than men, and immigrants seem to be at higher risk.

Explaining the causes of delusions continues to be challenging and several theories have been developed. One is the genetic or biological theory, which states that close relatives of people with delusional disorder are at increased risk of delusional traits. Another theory is the dysfunctional cognitive processing, which states that delusions may arise from distorted ways people have of explaining life to themselves. A third theory is called motivated or defensive delusions. This one states that some of those persons who are predisposed might suffer the onset of delusional disorder in those moments when coping with life and maintaining high self-esteem becomes a significant challenge. In this case, the person views others as the cause of their personal difficulties in order to preserve a positive self-view.

This condition is more common among people who have poor hearing or sight. Also, ongoing stressors have been associated with a higher possibility of developing delusions. Examples of such stressors are immigration, low socioeconomic status, and even possibly the accumulation of smaller daily hassles.

Treatment consists of supportive care during the acute intoxication phase: maintaining hydration, body temperature, blood pressure, and heart rate at acceptable levels until the drug is sufficiently metabolized to allow vital signs to return to baseline. Typical and atypical antipsychotics have been shown to be helpful in the early stages of treatment. This is followed by abstinence from psychostimulants supported with counseling or medication designed to assist the individual preventing a relapse and the resumption of a psychotic state.

Before beginning treatment for mania, careful differential diagnosis must be performed to rule out secondary causes.

The acute treatment of a manic episode of bipolar disorder involves the utilization of either a mood stabilizer (valproate, lithium, or carbamazepine) or an atypical antipsychotic (olanzapine, quetiapine, risperidone, or aripiprazole). Although hypomanic episodes may respond to a mood stabilizer alone, full-blown episodes are treated with an atypical antipsychotic (often in conjunction with a mood stabilizer, as these tend to produce the most rapid improvement).

When the manic behaviours have gone, long-term treatment then focuses on prophylactic treatment to try to stabilize the patient's mood, typically through a combination of pharmacotherapy and psychotherapy. The likelihood of having a relapse is very high for those who have experienced two or more episodes of mania or depression. While medication for bipolar disorder is important to manage symptoms of mania and depression, studies show relying on medications alone is not the most effective method of treatment. Medication is most effective when used in combination with other bipolar disorder treatments, including psychotherapy, self-help coping strategies, and healthy lifestyle choices.

Lithium is the classic mood stabilizer to prevent further manic and depressive episodes. A systematic review found that long term lithium treatment substantially reduces the risk of bipolar manic relapse, by 42%. Anticonvulsants such as valproate, oxcarbazepine and carbamazepine are also used for prophylaxis. More recent drug solutions include lamotrigine, which is another anticonvulsant. Clonazepam (Klonopin) is also used. Sometimes atypical antipsychotics are used in combination with the previous mentioned medications as well, including olanzapine (Zyprexa) which helps treat hallucinations or delusions, Asenapine (Saphris, Sycrest), aripiprazole (Abilify), risperidone, ziprasidone, and clozapine which is often used for people who do not respond to lithium or anticonvulsants.

Verapamil, a calcium-channel blocker, is useful in the treatment of hypomania and in those cases where lithium and mood stabilizers are contraindicated or ineffective. Verapamil is effective for both short-term and long-term treatment.

Antidepressant monotherapy is not recommended for the treatment of depression in patients with bipolar disorders I or II, and no benefit has been demonstrated by combining antidepressants with mood stabilizers in these patients.

Prevention of schizophrenia is difficult as there are no reliable markers for the later development of the disorder. There is tentative evidence for the effectiveness of early interventions to prevent schizophrenia. While there is some evidence that early intervention in those with a psychotic episode may improve short-term outcomes, there is little benefit from these measures after five years. Attempting to prevent schizophrenia in the prodrome phase is of uncertain benefit and therefore as of 2009 is not recommended. Cognitive behavioral therapy may reduce the risk of psychosis in those at high risk after a year and is recommended in this group, by the National Institute for Health and Care Excellence (NICE). Another preventative measure is to avoid drugs that have been associated with development of the disorder, including cannabis, cocaine, and amphetamines.

A 2012 paper suggested that, when compared with experiences today, psychiatric conditions associated with psychotic spectrum symptoms may be possible explanations for some revelatory driven experiences and activities such as those of Abraham, Moses, Jesus, and Saint Paul. However, the paper admits that the study was not aimed to deny supernatural elements, nor was it conclusive on whether their experiences were delusional in part or not at all.

Examples from a 295-subject study in Lithuania showed that the most common religious delusions were being a saint (in women) and being God (in men).

In one study of 193 people who had previously been admitted to hospital and subsequently diagnosed with schizophrenia, 24% were found to have religious delusions.

A 1999 study identified that religious delusions were often present or expressed in persons with forensic committal to a psychiatric unit.

Research has found a tentative benefit in using minocycline to treat schizophrenia. Nidotherapy or efforts to change the environment of people with schizophrenia to improve their ability to function, is also being studied; however, there is not enough evidence yet to make conclusions about its effectiveness. Negative symptoms have proven a challenge to treat, as they are generally not made better by medication. Various agents have been explored for possible benefits in this area. There have been trials on drugs with anti-inflammatory activity, based on the premise that inflammation might play a role in the pathology of schizophrenia.

Current cognitive neuropsychology research points toward a two-factor approach to the cause of monothematic delusions. The first factor being the anomalous experience—often a neurological defect—which leads to the delusion, and the second factor being an impairment of the belief formation cognitive process.

As an example of one of these first factors, several studies point toward Capgras delusion being the result of a disorder of the affect component of face perception. As a result, while the person can recognize their spouse (or other close relation) they do not feel the typical emotional reaction, and thus the spouse does not seem like the person they once knew.

As studies have shown, these neurological defects are not enough on their own to cause delusional thinking. An additional second factor—a bias or impairment of the belief formation cognitive process—is required to solidify and maintain the delusion. Since we do not currently have a solid cognitive model of the belief formation process, this second factor is still somewhat of an unknown.

Some research has shown that delusional people are more prone to jumping to conclusions, and thus they would be more likely to take their anomalous experience as veridical and make snap judgments based on these experiences. Additionally, studies have shown that they are more prone to making errors due to matching bias—indicative of a tendency to try and confirm the rule. These two judgment biases help explain how delusion-prone people could grasp onto extreme delusions and be very resistant to change.

Researchers claim this is enough to explain the delusional thinking. However, other researchers still argue that these biases are not enough to explain why they remain completely impervious to evidence over time. They believe that there must be some additional unknown neurological defect in the patient's belief system (probably in the right hemisphere).

Various modalities of treatment, including pharmacotherapy, psychotherapy, and various other psychosocial and educational interventions, are used in the treatment of schizophreniform disorder. Pharmacotherapy is the most commonly used treatment modality as psychiatric medications can act quickly to both reduce the severity of symptoms and shorten their duration. The medications used are largely the same as those used to treat schizophrenia, with an atypical antipsychotic as the usual drug of choice. Patients who do not respond to the initial atypical antipsychotic may benefit from

being switched to another atypical antipsychotic, the addition of a mood stabilizer such as lithium or an anticonvulsant, or being switched to a typical antipsychotic.

Treatment of schizophreniform disorder can occur in inpatient, outpatient, and partial hospitalization settings. In selecting the treatment setting, the primary aims are to minimize the psychosocial consequences for the patient and maintain the safety of the patient and others. While the need to quickly stabilize the patient's symptoms almost always exists, consideration of the patient's severity of symptoms, family support, and perceived likelihood of compliance with outpatient treatment can help determine if stabilization can occur in the outpatient setting. Patients who receive inpatient treatment may benefit from a structured intermediate environment, such as a sub-acute unit, step-down unit, partial hospital, or day hospital, during the initial phases of returning to the community.

As improvement progresses during treatment, help with coping skills, problem-solving techniques, psychoeducational approaches, and eventually occupational therapy and vocational assessments are often very helpful for patients and their families. Virtually all types of individual psychotherapy are used in the treatment of schizophreniform disorder, except for insight-oriented therapies as patients often have limited insight as a symptom of their illness.

Since schizophreniform disorder has such rapid onset of severe symptoms, patients are sometimes in denial about their illness, which also would limit the efficacy of insight-oriented therapies. Supportive forms of psychotherapy such as interpersonal psychotherapy, supportive psychotherapy, and cognitive behavior therapy are particularly well suited for the treatment of the disorder. Group psychotherapy is usually not indicated for patients with schizophreniform disorder because they may be distressed by the symptoms of patients with more advanced psychotic disorders.

There is limited evidence that caffeine, in high doses or when chronically abused, may induce psychosis in normal individuals and worsen pre-existing psychosis in those diagnosed with schizophrenia.

Current methods in treating early-onset schizophrenia follow a similar approach to the treatment of adult schizophrenia. Although modes of treatment in this population is largely understudied, the use of antipsychotic medication is commonly the first line of treatment in addressing symptoms. Recent literature has failed to determine if typical or atypical antipsychotics are most effective in reducing symptoms and improving outcomes. When weighing treatment options, it is necessary to consider the adverse effects of various medications used to treat schizophrenia and the potential implications of these effects on development. A 2013 systematic review compared the efficacy of atypical antipsychotics versus typical antipsychotics for adolescents:

Madaan et al. wrote that studies report efficacy of typical neuroleptics such as thioridazine, thiothixene, loxapine and haloperidol, high incidence of side effects such as extrapyramidal symptoms, akathisia, dystonias, sedation, elevated prolactin, tardive dyskinesia.

When the focus is to remedy some injustice by legal action, they are sometimes called "querulous paranoia".

In cases where reporters of stalking behavior have been judged to be making false reports, a majority of them were judged to be delusional.

Research efforts are focusing on prevention in identifying early signs from relatives with associated disorders similar with schizophrenia and those with prenatal and birth complications. Prevention has been an ongoing challenge because early signs of the disorder are similar to those of other disorders. Also, some of the schizophrenic related symptoms are often found in children without schizophrenia or any other diagnosable disorder.