We derived a statistical model that discriminates between substance-induced psychosis (i.e., DSM-III-R organic delusional disorder or organic hallucinosis; ODD-OH) and DSM-III-R schizophrenia in patients who have both DSM-III-R psychoactive substance use disorders (PSUD) and prominent delusions or hallucinations. A sample of 211 PSUD inpatients was divided by year of admission into data sets A and B, each of which was divided between those with concurrent schizophrenia and those with concurrent ODD-OH. A six-predictor discriminant function correctly classified 76.2 percent of all set A patients, including 83.1 percent with schizophrenia. Formal thought disorder and bizarre delusions significantly predict a diagnosis of schizophrenia, with odds ratios (OR) of 3.55:1 and 6.09:1, respectively. Suicidal ideation (OR = 0.32:1), intravenous cocaine abuse (0.18:1), and a history of drug detoxification (0.26:1) or methadone maintenance (0.18:1) demonstrate inverse relationships with a schizophrenia diagnosis. The model was validated in set B, correctly predicting the diagnostic status of 70.4 percent of patients (72.5% with schizophrenia). The pattern of presenting symptoms and clinical history differs in patients with psychosis due to PSUD and in those whose psychosis is due to schizophrenia. The model presented here contributes to the differential diagnosis of schizophrenia and ODD-OH among patients with PSUD.