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.

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.

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.

Because of reduced levels of trust, there can be challenges in treating PPD. However, psychotherapy, antidepressants, antipsychotics and anti-anxiety medications can play a role when an individual is receptive to intervention.

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.

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.

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.

The primary treatment of schizophrenia is antipsychotic medications, often in combination with psychological and social supports. Hospitalization may occur for severe episodes either voluntarily or (if mental health legislation allows it) involuntarily. Long-term hospitalization is uncommon since deinstitutionalization beginning in the 1950s, although it still occurs. Community support services including drop-in centers, visits by members of a community mental health team, supported employment and support groups are common. Some evidence indicates that regular exercise has a positive effect on the physical and mental health of those with schizophrenia.

Research suggests that the severity of the delusions of grandeur is directly related to a higher self-esteem in individuals and inversely related to any individual’s severity of depression and negative self-evaluations. Lucas "et al." found that there is no significant gender difference in the establishment of grandiose delusion. However, there is a claim that ‘the particular component of Grandiose delusion’ may be variable across both genders. Also, it had been noted that the presence of GDs in people with at least grammar or high school education was greater than lesser educated persons. Similarly, the presence of grandiose delusions in individuals who are the eldest is greater than in individuals who are the youngest of their siblings.

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.

Some critical psychiatrists criticize the practice of defining one and the same belief as normal in one culture and pathological in another culture for cultural essentialism. They argue that since cultural influences are mixed, including not only parents and teachers but also peers, friends, books and the internet, and the same cultural influence can have different effects depending on earlier cultural influences, the assumption that culture can be boiled down to a few traceable, distinguishable and statistically quantifiable factors and that everything that does not fall in those factors must be biological, is not a justified assumption. Other critical psychiatrists argue that just because a person's belief is unshaken by one influence does not prove that it would remain unshaken by another. For example, a person whose beliefs are not changed by verbal correction from a psychiatrist, which is how delusion is usually diagnosed, may still change his or her mind when observing empirical evidence, only that psychiatry rarely if ever present patients with such situations.

Research suggests that paraphrenics respond well to antipsychotic drug therapy if doctors can successfully achieve sufficient compliance. Herbert found that Stelazine combined with Disipal was an effective treatment. It promoted the discharging of patients and kept discharged patients from being readmitted later. While behavior therapy may help patients reduce their preoccupation with delusions, psychotherapy is not currently of primary value.

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.

Involutional melancholia is classically treated with antidepressants and mood elevators.

Electroconvulsive therapy may also be used. Mid-century, there was a consensus that the technique indeed 'yields the best results in the long-lasting depressions of the change of life, the so-called "involutional melancholias", which before this form of treatment was introduced often required years of hospitalization'. The 21st century also records 'an excellent and rapid clinical response found in melancholia of recent onset...in older rather than younger patients' with ECT

Individuals who develop paraphrenia have a life expectancy similar to the normal population. Recovery from the psychotic symptoms seems to be rare, and in most cases paraphrenia results in in-patient status for the remainder of the life of the patient. Patients experience a slow deterioration of cognitive functions and the disorder can lead to dementia in some cases, but this development is no greater than the normal population.

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.

PPD occurs in about 0.5%–2.5% of the general population. It is seen in 2%–10% of psychiatric outpatients. It is more common in males.

For women taking psychiatric medication, the decision as to whether continue during pregnancy and whether to take them while breast feeding is difficult in any case; there is no data to guide this decision with respect to preventing postpartum psychosis. There is no data to guide a decision as to whether women at high risk for postpartum psychosis should take antipsychotic medicine to prevent it. For women at risk of postpartum psychosis, informing medical care-givers, and monitoring by a psychiatrist during pregnancy, in the perinatal period, and for a few weeks following delivery, is recommended.

For women with known bipolar disorder, taking medication during pregnancy roughly halves the risk of a severe postpartum episode, as does starting to take medication immediately after the birth.

The lack of a formal diagnosis in the DSM and ICD has hindered research. The causes of postpartum depression are unknown and are under investigation.

There is a need to better understand whether taking medication for prevention during pregnancy or immediately following birth, is useful.

Psychotherapy is aimed at alleviating core symptoms, recognizing episode triggers, reducing negative expressed emotion in relationships, recognizing prodromal symptoms before full-blown recurrence, and, practicing the factors that lead to maintenance of remission. Cognitive behavioral therapy, family-focused therapy, and psychoeducation have the most evidence for efficacy in regard to relapse prevention, while interpersonal and social rhythm therapy and cognitive-behavioral therapy appear the most effective in regard to residual depressive symptoms. Most studies have been based only on bipolar I, however, and treatment during the acute phase can be a particular challenge. Some clinicians emphasize the need to talk with individuals experiencing mania, to develop a therapeutic alliance in support of recovery.

A number of medications are used to treat bipolar disorder. The medication with the best evidence is lithium, which is an effective treatment for acute manic episodes, preventing relapses, and bipolar depression. Lithium reduces the risk of suicide, self-harm, and death in people with bipolar disorder. It is unclear if ketamine is useful in bipolar as of 2015.

In the ICD-10, Bouffée délirante is classified as a subtype of either Acute polymorphic psychotic disorder without symptoms of schizophrenia (F23.0) or Acute polymorphic psychotic disorder with symptoms of schizophrenia (F23.1).

"Bouffée délirante" literally means a "delirious flash".

STPD is rarely seen as the primary reason for treatment in a clinical setting, but it often occurs as a comorbid finding with other mental disorders. When patients with STPD are prescribed pharmaceuticals, they are most often prescribed the same drugs used to treat patients suffering from schizophrenia including traditional neuroleptics such as haloperidol and thiothixene. In order to decide which type of medication should be used, Paul Markovitz distinguishes two basic groups of schizotypal patients:

- Schizotypal patients who appear to be almost schizophrenic in their beliefs and behaviors (aberrant perceptions and cognitions) are usually treated with low doses of antipsychotic medications, e.g. thiothixene. However, it must be mentioned that long-term efficacy of neuroleptics is doubtful.

- For schizotypal patients who are more obsessive-compulsive in their beliefs and behaviors, SSRIs like Sertraline appear to be more effective.

Lamotrigine, an anti-convulsant, appears to be helpful in dealing with social isolation.