Psychosis is characterized by an elementary lack of trust in others. Trust is an inherently rewarding aspect of successful social interactions and can be examined using neuroeconomic paradigms. This study was aimed at investigating the underlying neural basis of diminished trust in psychosis. Functional magnetic resonance imaging data were acquired from 20 patients with psychosis and 20 healthy control subjects during two multiple-round trust games; one with a cooperative and the other with a deceptive counterpart. An a priori region of interest analysis of the right caudate nucleus, right temporo-parietal junction and medial prefrontal cortex was performed focusing on the repayment phase of the games. For regions with group differences, correlations were calculated between the haemodynamic signal change, behavioural outcomes and patients' symptoms. Patients demonstrated reduced levels of baseline trust, indicated by smaller initial investments. For the caudate nucleus, there was a significant game × group interaction, with controls showing stronger activation for the cooperative game than patients, and no differences for the deceptive game. The temporo-parietal junction was significantly more activated in control subjects than in patients during cooperative and deceptive repayments. There were no significant group differences for the medial prefrontal cortex. Patients' reduced activation within the caudate nucleus correlated negatively with paranoia scores. The temporo-parietal junction signal was positively correlated with positive symptom scores during deceptive repayments. Reduced sensitivity to social reward may explain the basic loss of trust in psychosis, mediated by aberrant activation of the caudate nucleus and the temporo-parietal junction. © 2013 The Author.