Background: The ability of inferring mental states of others (also named “Theory of Mind” or “ToM” abilitiy) has been developed due an evolution pressure exerted by progressively more complex societies and it might be impaired in schizophrenia and in schizotypal individuals. Such impairment might explain the occurrence of psychotic symptoms in these individuals. Objective: To review critically the literature on possible alterations of ToM processing in individuals with schizotypy or subsyndromal psychotic symptoms. Methods: We performed a search on MedLine database for articles published in English or Portuguese between 1990 and 2008, using the phrase “Schizotypal Personality Disorder [MeSH] AND “Theory of Mind” OR “Mentalising”. Results: Fifteen manuscripts have been selected, which used diverse experimental designs and instruments to evaluate schizotypal traits, vulnerability to psychosis and ToM abilities. Discussion: The reviewed articles aimed to establish relationships between vulnerability to psychosis and alterations in ToM processing. Some articles also approached the trait or state dependence character of ToM impairments. The great majority of the selected manuscripts suggested that individuals who scored high in schizotypy scales, as well as schizophrenic relatives, do show problems in ToM processing (which suggests a trait dependence character). However, these results should be interpreted carefully due to methodological problems seen in the majority of the studies.