Predictions about sensations resulting from motor acts are instantiated through neural mechanisms such as the corollary discharge. With each action, the corollary discharge provides an unconscious comparison between predicted and actual sensations resulting from the action; closer matches result in greater suppression of sensation. This mechanism is disrupted in schizophrenia (SZ) and may contribute to, or reflect a failure to, distinguish self- from externally generated experiences, a hallmark of psychosis. We asked whether disruption is specific to SZ or is seen in other psychotic illnesses and in first-degree relatives of psychotic patients. Corollary discharge function was assessed in SZ patients (n = 30), schizoaffective (SA) patients (n = 19), bipolar patients with a history of psychosis (BPP; n = 39), nonpsychotic relatives of SZ (n = 30), SA (n = 23), and BPP (n = 50) patients, and healthy controls (n = 43). The N1 component of the event-related potential, reflecting auditory cortical responses to sounds, was elicited by speech sound onset as subjects talked and later when they listened to a recording of those sounds. N1 was suppressed during talking compared to N1 during listening, consistent with the suppressive action of the corollary discharge mechanism. Suppression was significantly reduced in SZ and BPP patients, with a similar trend in the smaller SA group. Patient groups did not differ, and unaffected relatives did not differ from controls or probands. The failure to monitor sensations resulting from self-generated actions, implicating corollary discharge dysfunction, may be a common feature across affective and nonaffective psychosis. Data from unaffected family members do not indicate that this is a marker of psychosis risk.