BACKGROUND: Phenomenological psychopathologists have recently highlighted how people with delusions experience multiple realities (delusional and nondelusional) and have suggested that this double bookkeeping cannot be explained via predictive processing. Here, we present data from Kamin blocking and extinction learning that show how predictive processing might, in principle, explain a pervasive sense of dual reality. METHODS: This cross-sectional study involved 3 participant groups: patients with schizophrenia (SZ) (n = 42), healthy participants with elevated esoteric beliefs (EEBs) (clairaudient psychics) (n = 31), and healthy control participants (HCs) with neither illness nor significant delusional ideation (n = 62). We examined belief formation using a Kamin blocking causal learning task with extinction and delusions with the 40-item Peters Delusion Inventory, specifically the unreality item "Do things around you ever feel unreal, as though it was all part of an experiment?" as a proxy for unreality experiences and beliefs. A clinician also assessed symptoms with a structured clinical interview. RESULTS: Some people with SZ did not report a sense of unreality, and some people with elevated esoteric beliefs (but no psychotic illness) reported unreality experiences. No HCs reported them (despite reporting other delusion-like beliefs). Unreality experiences in clinical delusions and nonclinical delusion-like beliefs were associated with different types of aberrant prediction error processing. CONCLUSIONS: These data suggest how predictive processing may explain the sense of unreality. They indicate that different prediction error dysfunctions are associated with delusions with different contents. In this case, we have used predictive processing to address a salient issue raised by our phenomenological colleagues, namely the impact of psychosis on experiences of and beliefs about reality.