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Social isolation has been suggested to foster paranoia. Here we investigate whether social company (i.e., being alone vs. not) and its nature (i.e., stranger/distant vs. familiar other) affects paranoia differently depending on psychosis risk. Social interactions and paranoid thinking in daily life were investigated in 29 patients with clinically stable non-affective psychotic disorders, 20 first-degree relatives, and 26 controls (n = 75), using the experience sampling method (ESM). ESM was completed up to ten times daily for 1 week. Patients experienced marginally greater paranoia than relatives [b = 0.47, p = 0.08, 95% CI (− 0.06, 1.0)] and significantly greater paranoia than controls [b = 0.55, p = 0.03, 95% CI (0.5, 1.0)], but controls and relatives did not differ [b = 0.07, p = 0.78, 95% CI (− 0.47, 0.61)]. Patients were more often alone [68.5% vs. 44.8% and 56.2%, respectively, p = 0.057] and experienced greater paranoia when alone than when in company [b = 0.11, p = 0.016, 95% CI (0.02, 0.19)]. In relatives this was reversed [b = − 0.17, p b = − 0.02, p = 0.67, 95% CI (− 0.09, 0.06)]. The time-lagged association between being in social company and subsequent paranoia was non-significant and paranoia did not predict the likelihood of being in social company over time (both p’s = 0.68). All groups experienced greater paranoia in company of strangers/distant others than familiar others [X2(2) = 4.56, p = 0.03] and being with familiar others was associated with lower paranoia over time [X2(2) = 4.9, p = 0.03]. Patients are frequently alone. Importantly, social company appears to limit their paranoia, particularly when being with familiar people. The findings stress the importance of interventions that foster social engagement and ties with family and friends.