Provided herein are methods for diagnosing a psychotic disorder, such as schizophrenia, schizoaffective disorder or psychosis, predicated on a determination of a methylation phenotype of the subject based in part on the identity of a specific polymorphism in the MTHFR gene and the analysis of a suite of biomarkers and other functional measures and indices. Also provided herein are methods for predicting prognosis and functional outcomes for subjects having a psychotic disorder, and for treating subjects having a psychotic disorder.