Mentalizing ability was studied in 46 symptomatic schizophrenic patients and 44 non-symptomatic controls. Subjects heard six stories and simultaneously were shown simple cartoon pictures depicting the action sequencing occurring in the stories. All the stories involved false belief or deception, so that it was necessary to infer the mental states of the characters in order to understand their behaviour. After each story, subjects were asked one memory/reality question (concerning an event in the story) and one question that depended on the ability to infer the mental state of one of the characters. Patients with paranoid delusions were impaired on the questions concerning mental states. Patients with behavioural signs (i.e. negative features or incoherence) were also impaired on the mental state questions, but this difficulty was associated with memory impairments. Patients with symptoms of passivity (e.g. delusions of control) and patients in remission did not differ from normal controls. These results are consistent with the hypothesis that certain of the positive symptoms of schizophrenia reflect an impairment in the ability to infer the mental states of others.