Background: For several years, studies have indicated that schizophrenia is overdiagnosed in nonwhite patients with psychosis. Whether these reports have altered racial diagnostic patterns in clinical settings remains uncertain. We hypothesized that the clinical overdiagnosis of schizophrenia in nonwhite patients persists in the public sector. Further, we explored whether differences between races in secondary (comorbid) diagnoses contribute to discrepancies in primary diagnoses. Method: Data were obtained by retrospective chart reviews of 173 patients with psychotic disorders discharged during a recent 7-month period from a large state psychiatric hospital. Demographic and clinical variables were obtained from the medical records. All clinical information had been recorded by the treatment teams without knowledge of this study. Only black and white racial subgroups were represented in this sample. Results: Black patients were significantly more likely to be diagnosed with schizophrenia than white patients (odds ratio = 5.1), and men were more likely to be diagnosed with schizophrenia than women (odds ratio = 1.9). This racial pattern was observed even in the subgroup of patients hospitalized for the first time (odds ratio = 7.0). Neither the type nor frequency of comorbid diagnoses significantly differed between races. Additionally, black patients received higher doses of antipsychotic medication. Conclusion: Black patients with psychosis are significantly more likely to be diagnosed with schizophrenia than similar white patients in the public sector. This may reflect underdiagnosis of affective illness in black patients. Additionally the higher doses of antipsychotic medication that black patients received may alter clinical presentation and contribute to this discrepancy in diagnosis.