Psychosis has traditionally been conceptualized as a distinct categorical disease entity. However, evidence from experimental, psychopathological, neurobiological, and genetic studies indicate overlapping symptoms, treatments, outcomes, and biological and genetic markers, suggesting a multidimensional spectrum encompassing nonaffective and affective domains. Outside the realm of clinical psychosis, epidemiological evidence from population cohorts has revealed an extended psychosis phenotype of subtle psychotic experiences, co-occurring with affective, motivational, and cognitive features, with prevalence rates of 5%–15%. The extended psychosis phenotype in the general population appears to pertain, phenomenologically, temporally and etiologically, to the same spectrum as clinical psychosis. Psychosis thus represents a multidimensional spectrum phenotype, transcending not only the distinction between diagnostic categories but also between health and illness. Research and practice in clinical and nonclinical samples can benefit from the explanatory power that is offered by conceptualizing psychosis as a multidimensional transdiagnostic spectrum phenotype. Models linking the impact of environmental and genetic influences, and their interactions, to severity and type of dimensional psychopathology have yielded promising results, as have studies researching psychosis as a developmental phenotype progressing from subthreshold psychosis proneness, to increasing levels of persistence over time and, finally, transition to a psychotic disorder.