Differences in functioning between the two cerebral hemispheres have been reported for more than a century. In recent decades, issues related to lateralized dysfunction have been raised in psychiatric illnesses such as schizophrenia and bipolar disorder. In particular, evidence suggests that schizophrenia may be particularly associated with left hemisphere dysfunction and bipolar disorder with right hemisphere dysfunction. We discuss these issues, along with a conceptual framework for integrating hypotheses about the relationship between the major psychotic illnesses based on a two-dimensional continuum. We also present new findings from our study of motor asymmetry in older patients with psychosis that support this framework. Our results indicate that schizophrenia may be associated with left hemisphere pathology to a greater extent than right, whereas the reverse may occur in bipolar disorder.