This study investigated the quality of mother-infant interaction and maternal ability to recognise adult affect in three study groups consisting of mothers with a diagnosis of schizophrenia, mothers with depression and healthy controls. Sixty-four mothers were recruited from a Mother and Baby Unit and local children's centres. A 5-min mother-infant interaction was coded on a number of caregiving variables. Affect recognition and discrimination abilities were tested via a series of computerised tasks. Group differences were found both in measures of affect recognition and in the mother-infant interaction. Mothers with schizophrenia showed consistent impairments across most of the parenting measures and all measures of affect recognition and discrimination. Mothers with depression fell between the mothers with schizophrenia and healthy controls on most measures. However, depressed women's parenting was not significantly poorer than controls on any of the measures, and only showed trends for differences with mothers with schizophrenia on a few measures. Regression analyses found impairments in affect recognition and a diagnosis of schizophrenia to predict the occurrence of odd or unusual speech in the mother-infant interaction. Results add to the growing body of knowledge on the mother-infant interaction in mothers with schizophrenia and mothers with depression compared to healthy controls, suggesting a need for parenting interventions aimed at mothers with these conditions. While affect recognition impairments were not found to fully explain differences in parenting among women with schizophrenia, further research is needed to understand the psychopathology of parenting disturbances within this clinical group.