BACKGROUND: Psychotic symptoms are common in adolescents in the general population but it is unknown whether they are associated with poor social functioning. AIMS: To investigate whether adolescent psychotic symptoms are associated with poor social functioning measured by peer relationships. METHOD: Data from the Avon Longitudinal Study of Parents and Children cohort was used. Logistic regression was used to explore the relationship between psychotic symptoms at 12.9years detected using a semi-structured interview and poor social functioning at 13.2years using parent-reported peer problems from the Strengths and Difficulties Questionnaire. RESULTS: There was strong evidence (p<0.001) of an unadjusted association between psychotic symptoms and poor social functioning (OR 1.41, 95% CI 1.24-1.61). The association was attenuated after adjusting for earlier social functioning, socio-demographic variables, bullying status and IQ (OR 1.28, 95% CI 1.09-1.50). The majority of the crude association was explained by additional adjustment for emotional problems including depression at age 12, emotional symptoms, hyperactivity and conduct problems at age 11 (OR 1.07, 95% CI 0.89-1.29). CONCLUSION: Adolescents with psychotic symptoms may be no more likely to have poor social functioning than other adolescents, once other emotional problems have been taken into account. The discussion addressed two explanations. First, emotional problems may be on the causal pathway from psychotic symptoms to poor social functioning. Alternatively, emotional symptoms may act as a confounder, suggesting that medical intervention may be inappropriate. It is the impact of psychotic symptoms on the individual that should dictate whether any intervention is required.