As with schizophrenia in general, the cause of paranoid schizophrenia is unknown but it is believed that a combination of genetic and environmental factors may be responsible.

Schizophrenia tends to run in families. Although it occurs in 1 percent of the general population, it occurs in 10 percent of people who have a first-degree relative (parent, brother or sister) with schizophrenia. People with a second-degree relative (aunt, uncle, grandparent or cousin) also develop schizophrenia at higher rates than the general population. People with a twin with the disorder have the greatest risk, with a 40 to 65 percent chance of developing schizophrenia, according to the National Institute of Mental Health (NIMH).

In addition to genes, environmental factors may play a role, such as factors that may cause mild brain damage in a developing fetus and complications that occur during birth. Psychosocial factors, such as stressful conditions, may also contribute to the development of paranoid schizophrenia.