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

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.

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).

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.

Individual therapy may be best suited to treat the individual's delusions. Persistence is needed in establishing a therapeutic empathy without validating the patient’s delusional system or overtly confronting the system. Cognitive techniques that include reality testing and reframing can be used. Antipsychotics and other therapeutic drugs have been used with relative success.

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.

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.

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 delusions that fall under this category are:

- Capgras delusion: the belief that (usually) a close relative or spouse has been replaced by an identical-looking impostor.

- Fregoli delusion: the belief that various people whom the believer meets are actually the same person in disguise.

- Intermetamorphosis: the belief that people in one's environment swap identities with each other while maintaining the same appearance.

- Subjective doubles: a person believes there is a doppelgänger or double of him- or herself carrying out independent actions.

- Cotard delusion: the belief that oneself is dead or does not exist; sometimes coupled with the belief that one is putrefying or missing internal organs.

- Mirrored-self misidentification: the belief that one's reflection in a mirror is some other person.

- Reduplicative paramnesia: the belief that a familiar person, place, object, or body part has been duplicated. For example, a person may believe that they are, in fact, not in the hospital to which they were admitted, but in an identical-looking hospital in a different part of the country.

- Somatoparaphrenia: the delusion where one denies ownership of a limb or an entire side of one's body (often connected with stroke).

Note that some of these delusions are sometimes grouped under the umbrella term of delusional misidentification syndrome.

Once it has been positively identified, pharmacotherapy follows. Antipsychotic drugs are the frontrunners in treatment for Fregoli and other DMSs. In addition to antipsychotics, anticonvulsants and antidepressants are also prescribed in some treatment courses. If a Fregoli patient has other psychological disorders, treatment often results in the use of trifluoperazine.

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.

Neither antidepressants nor antipsychotics have been found to be useful, Additionally antipsychotics can worsen symptoms of depersonalisation. To date, no clinical trials have studied the effectiveness of benzodiazepines. Tentative evidence supports naloxone and naltrexone.

A combination of an SSRI and a benzodiazepine has been proposed to be useful for DPD patients with anxiety.

Modafinil used alone has been reported to be effective in a subgroup of individuals with depersonalization disorder (those who have attentional impairments, under-arousal and hypersomnia). However, clinical trials have not been conducted.

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.

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.

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.

The article "Cotard's syndrome: A Review" (2010) reports successful pharmacological treatments (mono-therapeutic and multi-therapeutic) using antidepressant, antipsychotic, and mood stabilizing drugs; likewise, with the depressed patient, electroconvulsive therapy (ECT) is more effective than pharmacotherapy. Cotard syndrome resulting from an adverse drug reaction to valacyclovir is attributed to elevated serum concentration of one of valacyclovir's metabolites, 9-carboxymethoxymethylguanine (CMMG). Successful treatment warrants cessation of the drug, valacyclovir. Hemodialysis was associated with timely clearance of CMMG and resolution of symptoms.

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.

An open study of cognitive behavior therapy has aimed to help patients reinterpret their symptoms in a nonthreatening way, leading to an improvement on several standardized measures. A standardized treatment for DPD based on cognitive behavioral principles was published in The Netherlands in 2011.

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.

Ideas of reference and delusions of reference describe the phenomenon of an individual's experiencing innocuous events or mere coincidences and believing they have strong personal significance. It is "the notion that everything one perceives in the world relates to one's own destiny".

In psychiatry, delusions of reference form part of the diagnostic criteria for psychotic illnesses such as schizophrenia, delusional disorder, bipolar disorder (during the elevated stages of mania), as well as schizotypal personality disorder. To a lesser extent, it can be a hallmark of paranoid personality disorder. Such symptoms can also be caused by intoxication, especially with hallucinogens or stimulants like methamphetamine.

A widely accepted treatment for the syndrome of subjective doubles has not been developed. Treatment methods for this disease sometimes include the prescription of antipsychotic drugs, however, the type of drug prescribed depends on the presence of other mental disorders. Antipsychotic drugs (also known as neuroleptics) such as risperidone, pimozide, or haloperidol may be prescribed to treat the underlying psychiatric illness.

In addition to drug therapy, interpersonal counseling has also been suggested as a method to ease relations between the patient and his/her suspected doubles. However, the relationship between the patient and his/her double is not always negative.

Chronic hallucinatory psychosis is a psychosis subtype, classified under "Other nonorganic psychosis" by the . Other abnormal mental symptoms in the early stages are, as a rule, absent. The patient is most usually quiet and orderly, with a good memory.

It has often been a matter of the greatest difficulty to decide under which heading of the recognized classifications individual members of this group should be placed. As the hallucinations give rise to slight depression, some might possibly be included under melancholia. In others, paranoia may develop. Others, again, might be swept into the widespread net of dementia praecox. This state of affairs cannot be regarded as satisfactory, for they are not truly cases of melancholia, paranoia, dementia praecox or any other described affection.

This disease, as its name suggests, is a hallucinatory case, for it is its main feature. These may be of all senses, but auditory hallucinations are the most prominent. At the beginning, the patient may realize that the hallucination is a morbid phenomenon and unaccountable. They may claim to hear a "voice" speaking, though there is no one in the flesh actually doing so. Such a state of affairs may last for years and possibly, though rarely, for life, and the subject would not be deemed insane in the ordinary sense of the word.

It's probable, however, that this condition forms the first stage of the illness, which eventually develops on definite lines. What usually happens is the patient seeks an explanation for the hallucinations. As none is forthcoming he/she tries to account for their presence and the result is a delusion, and, most frequently, a delusion of persecution. Also, it needs to be noted that the delusion is a comparatively late arrival and is the logical result of the hallucinations.

Delusional misidentification syndromes (DMS) are rooted in the inability to register the identity of something, whether it is an object, event, place or even a person. There are various forms of DMS, such as the syndrome of subjective doubles, intermetamorphosis, Capgras syndrome and Fregoli syndrome. However, all of these various syndromes have a common denominator: they are all due to malfunctional familiarity processing during information processing. The most common syndromes are Capgras and Fregoli. Capgras syndrome is the delusional belief that a friend, family member, etc., has been replaced by a twin impostor. Fregoli syndrome is the delusional belief that different people are in fact a single person who is in disguise. Other commonalities among these syndromes are that they are discriminatory in which object(s) are misidentified. Lastly, dopamine hyperactivity is evident in all DMSs and thus, all syndromes utilize antipsychotic medications to help control DMS.