Recent cognitive, genetic, and histological studies have highlighted significant overlap between psychotic bipolar disorder and schizophrenia. Specifically, both bipolar disorder and schizophrenia are characterized by interneuron dysfunction within the hippocampus, an essential structure for relational memory. Relational memory impairments are a common feature of schizophrenia, but have yet to be investigated in psychotic bipolar disorder. Here, we tested the hypothesis that psychotic bipolar disorder is characterized by relational memory deficits. We used a transitive inference (TI) paradigm, previously employed to quantify relational memory deficits in schizophrenia, to assess relational memory performance in 17 patients with psychotic bipolar disorder and 22 demographically matched control participants. Functional magnetic resonance imaging was used to examine hippocampal activity during recognition memory in patients and controls. Hippocampal volumes were assessed by manual segmentation. In contrast to our hypothesis, we found similar TI performance, hippocampal volume, and hippocampal recruitment during recognition memory in both groups. Both psychotic bipolar disorder patients and controls exhibited a positive correlation between hippocampal volume and relational memory performance. These data indicate that relational memory impairments are not a shared feature of non-affective and affective psychosis.