Sexual minorities have an increased risk of psychosis, potentially explained by experiences of social adversity. Sexual minorities may also have a specific risk of paranoid symptoms. The current study aimed to determine whether sexual minorities have increased risk of psychosis, whether they have a specific increased risk of paranoia when compared to auditory verbal hallucinations (AVHs), and whether social adversity such as bullying, recent discrimination, lack of social support, and drug use can explain this risk.The study used data from the Adult Psychiatric Morbidity Survey 2007 (n = 7,403), exploring both sexual identity and past sexual behaviour. Associations between sexual minority status and probable psychosis, paranoia, and AVH were analysed using logistic regression. Mediation analysis was also conducted using the Karlson-Holm-Breen method, with bullying, recent discrimination, social support, and drug use as mediators assessing pathways between sexual minority status and paranoia/AVH. Socio-demographic confounders were included in analyses.Sexual minority status did not significantly predict probable psychosis. Findings generally indicated a specific association between sexual minority status and paranoia when contrasted with AVH. However, sexual behaviour remained significantly associated with AVH in logistic regression models. Bullying, lack of social support, and drug use partially mediated the association between sexual minority status and paranoia.Sexual minority status appears to have a specific association with paranoia symptoms, which may be partially explained by experiences of social adversity. However, the cross-sectional nature of the study limits direct inference about causality of such symptoms.Sexual minority groups may be more likely to experience symptoms of paranoia. It may be important to consider experiences of social adversity such as bullying, lack of social support, and also history of drug use in the context of paranoia within these groups.