The early literature established the validity of the distinction between early onset schizophrenia and autism. In the modern context of increasing recognition of pervasive developmental disorders (PDD) and a growing interest in very early onset schizophrenia and other childhood onset psychoses, this clinical distinction is often difficult to make. This article looks at problems arising from overdiagnosing psychosis in those with PDD. Four case examples of misattributed diagnosis of psychosis are described. The features that were mistaken for psychotic phenomena are described and explained and successfully treated in the context of a diagnosis of PDD. The article describes problems of reliability of ascertaining subjective mental phenomena and the range of mental phenomena that need to be recognized in PDD. The overlap of abnormal perceptions and cognitions in both these conditions is described with reference to the literature. It is evident that more needs to be done to improve diagnostic reliability of psychosis in PDD, by improving clinical awareness and research tools.