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.

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).

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.

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.

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.

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.

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.

In the DSM-IV-TR, paranoia is diagnosed in the form of:

- paranoid personality disorder ()

- paranoid schizophrenia (a subtype of schizophrenia) ()

- the persecutory type of delusional disorder, which is also called "querulous paranoia" when the focus is to remedy some injustice by legal action. ()

According to clinical psychologist P. J. McKenna, "As a noun, paranoia denotes a disorder which has been argued in and out of existence, and whose clinical features, course, boundaries, and virtually every other aspect of which is controversial. Employed as an adjective, paranoid has become attached to a diverse set of presentations, from paranoid schizophrenia, through paranoid depression, to paranoid personality—not to mention a motley collection of paranoid 'psychoses', 'reactions', and 'states'—and this is to restrict discussion to functional disorders. Even when abbreviated down to the prefix para-, the term crops up causing trouble as the contentious but stubbornly persistent concept of paraphrenia".

At least 50% of the diagnosed cases of schizophrenia experience delusions of reference and delusions of persecution. Paranoia perceptions and behavior may be part of many mental illnesses, such as depression and dementia, but they are more prevalent in three mental disorders: paranoid schizophrenia, delusional disorder (persecutory type), and paranoid personality disorder.

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.

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.

The attribution model has been well talked about regarding paranoid or delusional individuals. The idea is that they like to assign issues to external events. A motivation behind this characteristic may involve the need for that person to develop a better self-image and maintain self-confidence. There have been debates about whether or not paranoid individuals are more likely to have a low or high self-perception, and results have been generated for both of these hypotheses. Researchers have made a distinction between positive self-esteem and negative self-esteem revealing that paranoid delusional individuals have more of a negative self-evaluation.

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.

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.

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.

Studies suggest that the prevalence of paraphrenia in the elderly population is around 2-4%.

While paraphrenia can occur in both men and women, it is more common in women, even after the difference has been adjusted for life expectancies. The ratio of women with paraphrenia to men with paraphrenia is anywhere from 3:1 to 45:2

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.

Because it is a rare and poorly understood condition, there is no definitive way to diagnose the Capgras delusion. Diagnosis is primarily made on psychological evaluation of the patient, who is most likely brought to a psychologist's attention by a family member or friend believed to be an imposter by the person under the delusion.

This diagnostic rubric is not recommended for general use because it is not clearly demarcated either from simple schizophrenia or from schizoid or paranoid personality disorders, or possibly autism and Asperger syndrome as currently diagnosed. If the term is used, three or four of the typical features listed above should have been present, continuously or episodically, for at least 2 years. The individual must never have met criteria for schizophrenia itself. A history of schizophrenia in a first-degree relative gives additional weight to the diagnosis but is not a prerequisite.

Treatment of mixed states is typically based upon administration of mood stabilizing medication, which may include anticonvulsants such as valproic acid; atypical antipsychotics such as olanzapine, aripiprazole, and ziprasidone; or first-generation antipsychotics such as haloperidol. There is question of lithium's efficacy for treatment of mixed states due to conflicting conclusions drawn from various trials and research. Mood stabilizers work to reduce the manic symptoms associated with the mixed state, but they are not considered particularly effective for improving concurrent depressive symptoms.

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.

There is a significant difference between the number of those who would benefit from treatment and the number of those who are treated. The so-called "treatment gap" is a function of the disinclination of the afflicted to submit for treatment, an underdiagnosing of the disorder by healthcare providers, and the limited availability and access to state-of-the-art treatments. Nonetheless, individuals with BPD accounted for about 20 percent of psychiatric hospitalizations in one survey. The majority of individuals with BPD who are in treatment continue to use outpatient treatment in a sustained manner for several years, but the number using the more restrictive and costly forms of treatment, such as inpatient admission, declines with time.

Experience of services varies. Assessing suicide risk can be a challenge for clinicians, and patients themselves tend to underestimate the lethality of self-injurious behaviors. People with BPD typically have a chronically elevated risk of suicide much above that of the general population and a history of multiple attempts when in crisis. Approximately half the individuals who commit suicide meet criteria for a personality disorder. Borderline personality disorder remains the most commonly associated personality disorder with suicide.

After the death of a patient in 2014 NHS England was criticised by a coroner for the lack of commissioned services to support such patients. Evidence was given that 45% of mentally disordered females had BPD and there was no provision or priority for therapeutic psychological services. There were only 60 specialised inpatient beds in England – all in the North East or London.

There is a considerable personality disorder diagnostic co-occurrence. Patients who meet the DSM-IV-TR diagnostic criteria for one personality disorder are likely to meet the diagnostic criteria for another. Diagnostic categories provide clear, vivid descriptions of discrete personality types but the personality structure of actual patients might be more accurately described by a constellation of maladaptive personality traits.

"Sites used DSM-III-R criterion sets. Data obtained for purposes of informing the development of the DSM-IV-TR personality disorder diagnostic criteria."

Abbreviations used: "PPD – Paranoid Personality Disorder, SzPD – Schizoid Personality Disorder, StPD – Schizotypal Personality Disorder, ASPD – Antisocial Personality Disorder, BPD – Borderline Personality Disorder, HPD – Histrionic Personality Disorder, NPD – Narcissistic Personality Disorder, AvPD – Avoidant Personality Disorder, DPD – Dependent Personality Disorder, OCPD – Obsessive-Compulsive Personality Disorder, PAPD – Passive-Aggressive Personality Disorder."

More than two-thirds of people diagnosed with BPD also meet the criteria for another Axis II personality disorder at some point in their lives. (In a 2008 study, the rate was 73.9 percent.) Cluster A disorders, which include paranoid, schizoid, and schizotypal, are the most common, with a prevalence of 50.4 percent in people with BPD.

The second most common is another Cluster B disorder, which includes antisocial, histrionic, and narcissistic. These have an overall prevalence of 49.2 percent in people with BPD, with narcissistic being the most common, at 38.9 percent; antisocial the second most common, at 13.7 percent; and histrionic the least common, at 10.3 percent. The least common are Cluster C disorders, which include avoidant, dependent, and obsessive-compulsive, and have a prevalence of 29.9 percent in people with BPD. The percentages for specific comorbid Axis II disorders can be found in the adjacent table.