Gene–environment interactions involving the catechol-O-methyltransferase Val158Met polymorphism (COMTVal158Met) have been implicated in the causation of psychosis. Evidence from general population studies suggests that Met/Met subjects are sensitive to stress, a trait associated with psychosis. We hypothesized that the Met allele would moderate the effects of stress on negative affect (NA) in controls, and on NA and psychosis in patients with a psychotic disorder. Thirty-one patients with a psychotic disorder and comorbid cannabis misuse and 25 healthy cannabis users were studied with the experience sampling method (ESM), a structured diary technique assessing current context and emotional and psychotic experiences in daily life. A significant interaction between COMTVal158Met genotype and ESM stress in the model of NA was found for patients (interaction χ2 = 7.4, P = 0.02), but not for controls (interaction χ2 = 3.8, P = 0.15). In the model of ESM psychosis, a significant interaction between COMTVal158Met genotype and ESM stress was also apparent (interaction χ2 = 11.6, P < 0.01), with Met/Met patients showing the largest increase in psychotic experiences as well as NA in reaction to ESM stress. The findings suggest that the COMTVal158Met polymorphism moderates affective and psychotic responses to stress in patients with psychosis, providing evidence for gene–environment interaction mechanisms in the formation of psychotic symptoms. © 2007 Wiley-Liss, Inc.