BACKGROUND: Early exposure to neighborhood social fragmentation has been shown to be associated with schizophrenia. The impact of social fragmentation and friendships on distressing psychotic-like experiences (PLE) remains unknown. We investigate the relationships between neighborhood social fragmentation, number of friends, and distressing PLE among early adolescents. METHODS: Data were collected from the Adolescent Brain Cognitive Development Study. Generalized linear mixed models tested associations between social fragmentation and distressing PLE, as well as the moderating role of the number of total and close friends. RESULTS: Participants included 11 133 adolescents aged 9 to 10, with 52.3% being males. Greater neighborhood social fragmentation was associated with higher levels of distressing PLE (adjusted = 0.05; 95% CI: 0.01-0.09). The number of but not total friends significantly interacted with social fragmentation to predict distressing PLE (adjusted = -0.02; 95% CI: -0.04 to <-0.01). Among those with fewer close friends, the association between neighborhood social fragmentation and distressing PLE was significant (adjusted = 0.07; 95% CI: 0.03-0.11). However, among those with more close friends, the association was non-significant (adjusted = 0.03; 95% CI: -0.01 to 0.07). CONCLUSIONS: Greater neighborhood social fragmentation is associated with higher levels of distressing PLE, particularly among those with fewer close friends. Further research is needed to disentangle aspects of the interaction between neighborhood characteristics and the quality of social interactions that may contribute to psychosis, which would have implications for developing effective interventions at the individual and community levels.