Emotions play a key role in the development and experience of psychosis, yet there are important gaps in our understanding of how individuals with psychosis understand and respond to their emotions. This systematic review investigated self-reported emotion regulation difficulties in individuals with psychosis compared with non-clinical controls. An electronic database search was conducted in Medline, PsychINFO, and Embase and supplemented by searches of reference lists and citations. Seventeen studies were included. A narrative synthesis was conducted because contextual diversity was present across the studies and outcomes. Individuals with psychosis reported greater difficulties in (i) emotional clarity (specifically with identifying, describing, and understanding their emotions), (ii) emotional acceptance, (iii) engaging in goal-directed behaviours when experiencing negative emotions, and (iv) willingness to experience emotional distress in the pursuit of meaningful activities in life. Evidence pertaining to other self-reported emotion regulation difficulties was less clear. Effect sizes were generally large in magnitude but there were few studies on some self-reported emotion regulation difficulties, and all studies were at moderate to high risk of bias. Further research is needed to clarify the nature of emotion regulation difficulties in individuals with psychosis to inform the provision of targeted clinical interventions.