Persistent paranoid symptoms are best understood as having multiple causal mechanisms. An enhanced multidimensional understanding of paranoia may result from the convergence of two distinct measurement paradigms, experimental psychopathology and social cognitive research. This study investigated the role of neurocognitive deficits and emotion misperception bias as they relate to paranoid symptoms at two different time points in a sample of individuals with severe mental illness (primarily schizophrenia spectrum disorders [N=91]) undergoing intensive psychosocial rehabilitation. Before intensive rehabilitation (but after initial stabilization), paranoid symptoms were related to a tendency to misperceive emotion as disgust. The impact of this social cognitive bias was amplified by perseveration (as measured by the COGLAB Card Sorting Task). Perseverative errors were associated with paranoid symptoms at both time points. After 6 months of treatment, there were significant reductions in paranoid symptoms and perseverative errors but no significant changes in emotion misperception biases. This study is one of few to date to evaluate the contribution of both neurocognitive deficits and social cognitive biases to paranoid symptoms. The results demonstrate how social cognitive biases can interact with neurocognitive deficits in expression of paranoid symptoms, and how these relationships change during treatment.