Although cognitive behavior therapy (CBT) has strong empirical support for treating a diverse array of psychological conditions, only recently has research begun to examine its efficacy in treating the symptoms associated with schizophrenia and other psychotic disorders. Several randomized controlled trials have been conducted on CBT for psychosis with some positive results, but trials comparing CBT to other nonspecific interventions have yielded less impressive findings. No well-controlled trial to date has attempted to dismantle the components of CBT for psychosis, to compare it to another empirically supported psychosocial intervention for this population, or to identify the specific mechanisms responsible for treatment effectiveness. In this paper, a review of the empirical status of CBT for psychosis is presented. In addition, promising but preliminary new research in this area is reviewed, including prevention and early intervention approaches and acceptance/mindfulness-based strategies. Within this context, limitations in the current literature are reviewed, and recommendations for future research are discussed.