Psychosis is first and foremost a diagnosis of exclusion. So a new-onset episode of psychosis "cannot" be considered a symptom of a psychiatric disorder until other relevant and known causes of psychosis are properly excluded, or ruled out. Many clinicians improperly perform, or entirely miss this step, introducing avoidable diagnostic error and misdiagnosis.

An initial assessment includes a comprehensive history and physical examination by a physician, psychiatrist, psychiatric nurse practitioner or psychiatric physician assistant. Biological tests should be performed to exclude psychosis associated with or caused by substance use, medication, toxins, surgical complications, or other medical illnesses.

Delirium should be ruled out, which can be distinguished by visual hallucinations, acute onset and fluctuating level of consciousness, indicating other underlying factors, including medical illnesses. Excluding medical illnesses associated with psychosis is performed by using blood tests to measure:

- Thyroid-stimulating hormone to exclude hypo- or hyperthyroidism,

- Basic electrolytes and serum calcium to rule out a metabolic disturbance,

- Full blood count including ESR to rule out a systemic infection or chronic disease, and

- Serology to exclude syphilis or HIV infection.

Other investigations include:

- EEG to exclude epilepsy, and an

- MRI or CT scan of the head to exclude brain lesions.

Because psychosis may be precipitated or exacerbated by common classes of medications, medication-induced psychosis should be ruled out, particularly for first-episode psychosis. Both substance- and medication-induced psychosis can be excluded to a high level of certainty, using a

- Urinalysis and a

- Full serum toxicology screening.

Because some dietary supplements may also induce psychosis or mania, but cannot be ruled out with laboratory tests, a psychotic individual's family, partner, or friends should be asked whether the patient is currently taking any dietary supplements.

Common mistakes made when diagnosing people who are psychotic include:

- Not properly excluding delirium,

- Not appreciating medical abnormalities (e.g., vital signs),

- Not obtaining a medical history and family history,

- Indiscriminate screening without an organizing framework,

- Missing a toxic psychosis by not screening for substances "and" medications

- Not asking family or others about dietary supplements,

- Premature diagnostic closure, and

- Not revisiting or questioning the initial diagnostic impression of primary psychiatric disorder.

Only after relevant and known causes of psychosis are excluded, a mental health clinician may make a psychiatric differential diagnosis using a person's family history, incorporating information from the person with psychosis, and information from family, friends, or significant others.

Types of psychosis in psychiatric disorders may be established by formal rating scales. The Brief Psychiatric Rating Scale (BPRS) assesses the level of 18 symptom constructs of psychosis such as hostility, suspicion, hallucination, and grandiosity. It is based on the clinician's interview with the patient and observations of the patient's behavior over the previous 2–3 days. The patient's family can also answer questions on the behavior report. During the initial assessment and the follow-up, both positive and negative symptoms of psychosis can be assessed using the 30 item Positive and Negative Symptom Scale (PANSS).

Schizophrenia is diagnosed based on criteria in either the American Psychiatric Association's (APA) fifth edition of the "Diagnostic and Statistical Manual of Mental Disorders" (DSM 5), or the World Health Organization's International Statistical Classification of Diseases and Related Health Problems (ICD-10). These criteria use the self-reported experiences of the person and reported abnormalities in behavior, followed by a clinical assessment by a mental health professional. Symptoms associated with schizophrenia occur along a continuum in the population and must reach a certain severity and level of impairment, before a diagnosis is made. As of 2013 there is no objective test.

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.

Psychosis as a symptom of a psychiatric disorder is first and foremost a diagnosis of exclusion. So a new-onset episode of psychosis "cannot" be considered to be a symptom of a psychiatric disorder until other relevant and known medical causes of psychosis are excluded, or ruled out. Many clinicians improperly perform, or entirely miss this step, introducing avoidable diagnostic error and misdiagnosis.

An initial assessment includes a comprehensive history and physical examination. Although no biological laboratory tests exist which confirm schizoaffective disorder, biological tests should be performed to exclude psychosis associated with or caused by substance use, medications, toxins or poisons, surgical complications, or other medical illnesses. Since non-medical mental health practitioners are not trained to exclude medical causes of psychosis, people experiencing psychosis should be referred to an emergency department or hospital.

Delirium should be ruled out, which can be distinguished by visual hallucinations, acute onset and fluctuating level of consciousness, indicating other underlying factors which includes medical illnesses. Excluding medical illnesses associated with psychosis is performed by using blood tests to measure:

- Thyroid-stimulating hormone to exclude hypo- or hyperthyroidism,

- Basic electrolytes and serum calcium to rule out a metabolic disturbance,

- Full blood count including ESR to rule out a systemic infection or chronic disease, and

- Serology to exclude syphilis or HIV infection.

Other investigations which may be performed include:

- EEG to exclude epilepsy, and an

- MRI or CT scan of the head to exclude brain lesions.

Blood tests are not usually repeated for relapse in people with an established diagnosis of schizoaffective disorder, unless there is a specific "medical" indication. These may include serum BSL if olanzapine has previously been prescribed, thyroid function if lithium has previously been taken to rule out hypothyroidism, liver function tests if chlorpromazine has been prescribed, CPK levels to exclude neuroleptic malignant syndrome, and a urinalysis and serum toxicology screening if substance use is suspected. Assessment and treatment may be done on an outpatient basis; admission to an inpatient facility is considered if there is a risk to self or others.

Because psychosis may be precipitated or exacerbated by common classes of psychiatric medications, such as antidepressants, ADHD stimulant medications, and sleep medications, prescribed medication-induced psychosis should be ruled out, particularly for first-episode psychosis. This is an essential step to reduce diagnostic error and to evaluate potential medication sources of further patient harm. Regarding prescribed medication sources of patient harm, Yale School of Medicine Professor of Psychiatry Malcolm B. Bowers, Jr, MD wrote:

Illicit drugs aren't the only ones that precipitate psychosis or mania—prescribed drugs can too, and in particular, some psychiatric drugs. We investigated this and found that about 1 in 12 psychotic or manic patients in an inpatient psychiatric facility are there due to antidepressant-induced psychosis or mania. That's unfortunate for the field [of psychiatry] and disastrous for some of our patients.

Substance-induced psychosis should also be ruled out. Both substance- and medication-induced psychosis can be excluded to a high level of certainty while the person is psychotic, typically in an emergency department, using both a

- Broad spectrum urine toxicology screening, and a

- Full serum toxicology screening (of the blood).

Some dietary supplements may also induce psychosis or mania, but cannot be ruled out with laboratory tests. So a psychotic person's family, partner, or friends should be asked whether he or she is currently taking any dietary supplements.

Common mistakes made when diagnosing psychotic patients include:

- Not properly excluding delirium,

- Missing a toxic psychosis by not screening for substances "and" medications,

- Not appreciating medical abnormalities (e.g., vital signs),

- Not obtaining a medical history and family history,

- Indiscriminate screening without an organizing framework,

- Not asking family or others about dietary supplements,

- Premature diagnostic closure, and

- Not revisiting or questioning the initial diagnostic impression of primary psychiatric disorder.

Only after these relevant and known causes of psychosis have been ruled out can a psychiatric differential diagnosis be made. A mental health clinician will incorporate family history, observation of a psychotic person's behavior while the person is experiencing active symptoms, to begin a psychiatric differential diagnosis. Diagnosis also includes self-reported experiences, as well as behavioral abnormalities reported by family members, friends, or significant others. Mistakes in this stage include:

- Not screening for dissociative disorders. Dissociative identity disorder and psychotic symptoms in schizoaffective disorder have considerable overlap, yet a different overall treatment approach.

In 2013, the American Psychiatric Association released the fifth edition of the DSM (DSM-5). To be diagnosed with schizophrenia, two diagnostic criteria have to be met over much of the time of a period of at least one month, with a significant impact on social or occupational functioning for at least six months. The person had to be suffering from delusions, hallucinations, or disorganized speech. A second symptom could be negative symptoms, or severely disorganized or catatonic behaviour. The definition of schizophrenia remained essentially the same as that specified by the 2000 version of DSM (DSM-IV-TR), but DSM-5 makes a number of changes.

- Subtype classifications – such as catatonic and paranoid schizophrenia – are removed. These were retained in previous revisions largely for reasons of tradition, but had subsequently proved to be of little worth.

- Catatonia is no longer so strongly associated with schizophrenia.

- In describing a person's schizophrenia, it is recommended that a better distinction be made between the current state of the condition and its historical progress, to achieve a clearer overall characterization.

- Special treatment of Schneider's first-rank symptoms is no longer recommended.

- Schizoaffective disorder is better defined to demarcate it more cleanly from schizophrenia.

- An assessment covering eight domains of psychopathology – such as whether hallucination or mania is experienced – is recommended to help clinical decision-making.

The ICD-10 criteria are typically used in European countries, while the DSM criteria are used in the United States and to varying degrees around the world, and are prevailing in research studies. The ICD-10 criteria put more emphasis on Schneiderian first-rank symptoms. In practice, agreement between the two systems is high. The current proposal for the ICD-11 criteria for schizophrenia recommends adding self-disorder as a symptom.

If signs of disturbance are present for more than a month but less than six months, the diagnosis of schizophreniform disorder is applied. Psychotic symptoms lasting less than a month may be diagnosed as brief psychotic disorder, and various conditions may be classed as psychotic disorder not otherwise specified, while schizoaffective disorder is diagnosed if symptoms of mood disorder are substantially present alongside psychotic symptoms. If the psychotic symptoms are the direct physiological result of a general medical condition or a substance, then the diagnosis is one of a psychosis secondary to that condition. Schizophrenia is not diagnosed if symptoms of pervasive developmental disorder are present unless prominent delusions or hallucinations are also present.

In the ICD-10 there are several disorders with the manic syndrome: organic manic disorder (), mania without psychotic symptoms (), mania with psychotic symptoms (), other manic episodes (), unspecified manic episode (), manic type of schizoaffective disorder (), bipolar affective disorder, current episode manic without psychotic symptoms (), bipolar affective disorder, current episode manic with psychotic symptoms ().

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 most widely used criteria for diagnosing schizoaffective disorder are from the American Psychiatric Association's "Diagnostic and Statistical Manual of Mental Disorders-5".

The DSM-IV schizoaffective disorder definition was plagued by problems of being inconsistently (or unreliably) used on patients; when the diagnosis is made, it doesn't stay with most patients over time; and it has questionable diagnostic validity (that is, it doesn't describe a distinct disorder, nor predict any particular outcome). These problems have been slightly reduced (or "modestly improved") in the DSM-5 according to Carpenter.

When psychotic symptoms are confined to an episode of mania or depression (with or without mixed features), the diagnosis is that of a “psychotic” mood disorder, namely either bipolar disorder or major depression). Only when psychotic states persist in a sustained fashion for two weeks or longer without concurrent affective symptoms is the diagnosis schizoaffective disorder or schizophrenia.

The second cardinal guideline in the DSM-5 diagnosis of schizoaffective disorder is one of timeframe.

These two changes are intended by the DSM-5 workgroup to accomplish two goals:

- Increase the diagnosis' consistency (or reliability) when it is used;

- Significantly decrease the overall use of the schizoaffective disorder diagnosis.

If the schizoaffective diagnosis is used less often, other diagnoses (like psychotic mood disorders and schizophrenia) are likely to be used more often; but this is hypothetical until real-world data arrive. Validity problems with the diagnosis remain and await further work in the fields of psychiatric genetics, neuroimaging, and cognitive science that includes the overlapping fields of cognitive, affective, and social neuroscience, which may change the way schizoaffective disorder is conceptualized and defined in future versions of the DSM and ICD.

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.

In most cases hospital admission is necessary. Antipsychotic drugs and mood stabilizing drugs such as lithium are typically administered but is not clear if mood stabilizers can be titrated to a high enough level quickly enough to be effective. Electroconvulsive therapy may be considered, especially if there is a high risk of suicide.

Family support may be provided via a social worker.

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.

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.

Routine medical assessments are often prescribed to rule-out or identify a somatic cause for bipolar I symptoms. These tests can include ultrasounds of the head, x-ray computed tomography (CAT scan), electroencephalogram, HIV test, full blood count, thyroid function test, liver function test, urea and creatinine levels and if patient is on lithium, lithium levels are taken. Drug screening includes recreational drugs, particularly synthetic cannabinoids, and exposure to toxins.

The long-term outcome for psychotic depression is generally poorer than for non-psychotic depression.

The exact incidence and prevalence of brief psychotic disorder is not known, but it is generally considered uncommon. Internationally, it occurs twice as often in women than men, and even more often in women in the United States. It typically occurs in the late 30s and early 40s. The exact cause of brief psychotic disorder is not known. One theory suggests a genetic link, because the disorder is more common in people who have family members with mood disorders, such as depression or bipolar disorder. Another theory suggests that the disorder is caused by poor coping skills, as a defense against or escape from a particularly frightening or stressful situation. These factors may create a vulnerability to develop brief psychotic disorder. In most cases, the disorder is triggered by a major stress or traumatic event. Childbirth may trigger the disorder in some women. Approximately 1 in 10,000 women experience brief psychotic disorder shortly after childbirth. There are general medical causes of brief psychosis that should also be considered when being evaluated. Post-natal depression, HIV and AIDS, malaria, syphilis, Alzheimer's disease, Parkinson's disease, hypoglycaemia (an abnormally low level of glucose in the blood), lupus, multiple sclerosis, brain tumor and PANS.

The disorder is characterized by a sudden onset of psychotic symptoms, which may include delusions, hallucinations, disorganized speech or behavior, or catatonic behavior. The symptoms must not be caused by schizophrenia, schizoaffective disorder, delusional disorder or mania in bipolar disorder. They must also not be caused by a drug (such as amphetamines) or medical condition (such as a brain tumor). The term bouffée délirante describes an acute nonaffective and nonschizophrenic psychotic disorder, which is largely similar to DSM-III-R and DSM-IV brief psychotic and schizophreniform disorders.

Symptoms generally last at least a day, but not more than a month, and there is an eventual return to full baseline functioning. It may occur in response to a significant stressor in one's life, or in other situations where a stressor is not apparent, including in the weeks following birth. In diagnosis, a careful distinction is considered for culturally appropriate behaviors, such as religious beliefs and activities. It is believed to be connected to or synonymous with a variety of culture-specific phenomena such as latah, koro, and amok.

There are three forms of brief psychotic disorder:

1. Brief psychotic disorder with a stressor, such as a trauma or death in the family.

2. Brief psychotic disorder without a stressor, there is no obvious stressor.

3. Brief psychotic disorder with postpartum onset. Usually occurs about four weeks after giving birth.

The condition is rare, with only 80 established cases reported in medical literature and incomplete evidence of a further 200.

The theoretical tardive psychosis is distinct from schizophrenia and induced by the use of current (dopaminergic) antipsychotics by the depletion of dopamine and related to the known side effect caused by their long-term use, tardive dyskinesia.

In addition to dopaminergic upregulation in the nigrostriatal tracts, many investigators have suggested that dopaminergic upregulation may occur in mesolimbic or mesocortical tracts, leading to a worsening of psychosis beyond the original level. This phenomenon has been called 'tardive psychosis' or 'supersensitivity psychosis'.

Tardive psychosis was researched in 1978 and 1989, and sporadic research continues. Some studies have found it to be associated with psychotic depression and potentially, dissociation. For people with any tardive conditions clozapine remains an option but since it can create blood dyscrasias, which require frequent blood work, as well as other severe side effects, it is used increasingly less in clinical practice. Although tardive psychosis continues to be studied, it still has not been established as a fact but it is known that the study classes of antipsychotics such as the NMDA receptor modulators (glutamate antagonists) in not creating tardive dyskinesia will not create this condition.

Substance-induced psychosis (commonly known as toxic psychosis) is a form of substance use disorder where psychosis can be attributed to substance use. It is a psychosis that results from the poisonous effects of chemicals or drugs, including those produced by the body itself. Various psychoactive substances have been implicated in causing or worsening psychosis in users.

In the US, the American College of Obstetricians and Gynecologists suggests healthcare providers consider depression screening for perinatal women. Additionally, the American Academy of Pediatrics recommends pediatricians screen mothers for PPD at 1-month, 2-month and 4-month visits. However, many providers do not consistently provide screening and appropriate follow-up. For example, in Canada, Alberta is the only province with universal PPD screening. This screening is carried out by Public Health nurses with the baby's immunization schedule.

The Edinburgh Postnatal Depression Scale, a standardized self-reported questionnaire, may be used to identify women who have postpartum depression. If the new mother scores 13 or more, she likely has PPD and further assessment should follow.

Fink and Taylor developed a catatonia rating scale to identify the syndrome. A diagnosis is verified by a benzodiazepine or barbiturate test. The diagnosis is validated by the quick response to either benzodiazepines or electroconvulsive therapy (ECT). While proven useful in the past, barbiturates are no longer commonly used in psychiatry; thus the option of either benzodiazepines or ECT.

According to the DSM-5, "Catatonia Associated with Another Mental Disorder (Catatonia Specifier)" (code 293.89 [F06.1]) is diagnosed if the clinical picture is dominated by at least three of the following:

- stupor (i.e., no psychomotor activity; not actively relating to environment)

- catalepsy (i.e., passive induction of a posture held against gravity)

- waxy flexibility (i.e., allow positioning by examiner and maintain position)

- mutism (i.e., no, or very little, verbal response [exclude if known aphasia])

- negativism (i.e., opposition or no response to instructions or external stimuli)

- posturing (i.e., spontaneous and active maintenance of a posture against gravity)

- mannerisms (i.e., odd, circumstantial caricature of normal actions)

- stereotypy (i.e., repetitive, abnormally frequent, non-goal-directed movements)

- agitation, not influenced by external stimuli

- grimacing (i.e. making a grimace like children)

- echolalia (i.e., mimicking another's speech)

- echopraxia (i.e., mimicking another's movements)

Other disorders (used additional code 293.89 [F06.1] to indicate the presence of the comorbid catatonia):

- Catatonia associated with autism spectrum disorder.

- Catatonia associated with schizophrenia spectrum and other psychotic disorders.

- Catatonia associated with brief psychotic disorder

- Catatonia associated with schizophreniform disorder

- Catatonia associated with schizoaffective disorder

- Catatonia associated with substance-induced psychotic disorder

- Catatonia associated with bipolar and related disorders.

- Catatonia associated with major depressive disorder

- Catatonic disorder due to another medical condition.

If catatonic symptoms are present but they are don't form the catatonic syndrome, a medication-induced or substance-induced aetiology should first be considered.

Supersensitivity psychosis is used to discuss the spontaneous occurrence of psychotic episodes and/or the appearance of tardive dykinesia in the wake of anti-psychotic medication withdrawal.

Such spontaneous episodes have occurred even in patients who never had psychotic episodes before beginning the medication. Studies using Clozapine have found significant evidence.

Larger discussions of withdrawal from other antipsychotics usually focus on tardive dyskinesia, a far more significant and long-lasting side effect of antipsychotic treatment.

When supersensitivity psychosis was explored in 1978, a featured concern was increasing resistance to medication, requiring higher doses or not responding to higher doses. Some articles use the term tardive psychosis to reference to this specific concept. However, articles have disputed its' validity. The condition has been discovered in very few people. Palmstierna asserts that tardive psychosis is a combination of "several different and not necessarily correlated phenomena related to neuroleptic treatment of schizophrenia."

However, some articles use the term tardive psychosis as equivalent to supersensitivity psychosis.

Tardive psychosis is a term for a hypothetical form of psychosis, proposed in 1978. It was defined as a condition caused by long term use of neuroleptics, noticeable when the medication had become decreasingly effective, requiring higher doses, or when not responding to higher doses.

Evaluation suggests that tardive psychosis as a whole is a combination of "several different and not necessarily correlated phenomena related to neuroleptic treatment of schizophrenia."

Some articles equate tardive psychosis to supersensitivity psychosis. However, descriptions of symptoms of the latter do not match the former. Specific supersensitivity psychosis articles only address psychotic episodes in the wake of psychotic medication withdrawal associated with Clozapine. They do not mention medication resistance, which is the cornerstone of tardive psychosis theory.

A hypothetical condition related to tardive psychosis, tardive dysmentia, has also been questioned.

Efforts are made to find a treatment which targets the proposed specific underlying pathophysiology of psychotic depression. A promising candidate was mifepristone, which by competitively blocking certain neuro-receptors, renders cortisol less able to directly act on the brain and was thought to therefore correct an overactive HPA axis. However, a Phase III clinical trial, which investigated the use of mifepristone in PMD, was terminated early due to lack of efficacy.

Transcranial magnetic stimulation (TMS) is being investigated as an alternative to ECT in the treatment of depression. TMS involves the administration of a focused electromagnetic field to the cortex to stimulate specific nerve pathways.

Research has shown that psychotic depression differs from non-psychotic depression in a number of ways: potential precipitating factors, underlying biology, symptomatology beyond psychotic symptoms, long-term prognosis, and responsiveness to psychopharmacological treatment and ECT.