The neural basis of psychosis is yet to be fully elucidated. In this review the contribution of schizophrenia-like psychosis of epilepsy, delusional misidentification syndromes and psychotic phenomena, such as auditory and visual hallucinations, to our understanding of the neural basis of psychosis is examined. Schizophrenia-like psychosis of epilepsy is associated with seizures originating from the limbic structures. Reduced seizure frequency, left-sided electrical foci, and neurodevelopmental lesions manifesting as cortical dysgenesis are known to influence the likelihood of developing schizophrenia-like psychosis of epilepsy. The delusional misidentification syndromes are a group of rare psychiatric symptoms in which impairments of face recognition memory are present. These conditions appear also to be associated with organic lesions affecting limbic structures and also involving both the frontal and parietal lobes. There is evidence that right-sided lesions predominate in the aetiology of delusional misidentification syndromes. Thus, the common link between schizophrenia, schizophrenia-like psychosis of epilepsy and delusional misidentification syndromes appears to be involvement of limbic structures in their pathophysiology. Discrete psychotic phenomena such as visual and auditory hallucinations appear to arise from functional changes in the same cortical areas subserving the normal physiological functions of vision and audition but also involving limbic structures. In conclusion, the limbic structures appear to be central to the psychopathology of psychosis but with involvement of frontal and parietal structures. These inquiries are revealing as much about psychosis as they are about the nature of normal brain function.