This paper outlines a theoretical analysis of current psychological conceptualizations of psychosis that draws on Teasdale and Barnard's (1993) Interacting Cognitive Subsystems (ICS) model of depression. The ICS model differs from Beck et al.'s (1979) model of emotional disorders in that it specifies two qualitatively different levels of meaning. These different levels of meaning play a different role in the production, maintenance and modification of emotion, and indeed, also recognize the distinction between intellectual' belief and emotional' belief. Intellectual beliefs are at the level of specific propositional meaning: they have a truth value which can be assessed and they are not directly influenced by sensory information such as voice tone, arousal and body state, or visual stimuli. Given this, propositional meaning does not have a direct link to the production of emotion. Rather the link to emotion is an indirect one, through the activation of more generic and holistic affect-related schematic models. These latter schematic models are hypothesized to have implicational meaning, and correspond to schematic models derived from emotive experiences. In consequence they do not have a specific truth-value and they reflect contributions from a wide variety of sources, including multiple patterns of specific meanings, and patterns of direct sensory input. This ICS perspective proposes that integration of these two levels of meaning can facilitate the psychological conceptualization of the initiation, acceleration, and maintenance of positive psychotic symptomatology during relapse. This theoretical analysis is illustrated by the use of a case study, which describes the process and application of ICS to facilitating recovery from acute psychosis. This paper also provides a detailed discussion of the implications of this analysis for future research and psychological therapy. In particular, ICS has relevance for tracing the evolution of schematic beliefs during the early episodes of psychosis, which are hypothesized to have a bearing on the future course of psychosis. This has implications for the further development and expansion of psychological treatments for relapse and recovery from psychosis.