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Background The lifetime risk of suicide is significantly higher in patients with schizophrenia than in the general population. It has been suggested that insight is an important risk factor for suicidality in schizophrenia, but only in the presence of feelings of hopelessness and demoralization more generally. Methods This study set out to investigate these assumptions in a sample of patients diagnosed with schizophrenia (n = 81) with the Structured Clinical Interview for DSM-IV Axis I. We hypothesized that there would be a positive association between insight in schizophrenia, measured by the Insight Scale for Psychosis, and suicidality among these patients, measured by the Beck Scale for Suicide Ideation. Furthermore, we expected demoralization, measured by the Demoralization Scale, to mediate the association between insight and suicidality. Results With regard to the association between insight and suicidality, only the dimension awareness of illness was significantly positively associated with suicidality (r = .34, p ≤ .01**). Demoralization fully mediated the relationship between awareness of illness and suicidality (Sobel test z = 1.93, p Limitations This was a cross-sectional study in a relatively small sample, based on self-report questionnaires only. Conclusions This study emphasizes the importance of recognizing and treating demoralization features in schizophrenia.