Schizophrenia and other types of psychosis incur suffering, high health care costs and loss of human potential, due to the combination of early onset and poor response to treatment. Our ability to prevent or cure psychosis depends on knowledge of causal mechanisms. Molecular genetic studies show that thousands of common and rare variants contribute to the genetic risk for psychosis. Epidemiological studies have identified many environmental factors associated with increased risk of psychosis. However, no single genetic or environmental factor is sufficient to cause psychosis on its own. The risk of developing psychosis increases with the accumulation of many genetic risk variants and exposures to multiple adverse environmental factors. Additionally, the impact of environmental exposures likely depends on genetic factors, through gene–environment interactions. Only a few specific gene–environment combinations that lead to increased risk of psychosis have been identified to date. An example of replicable gene–environment interaction is a common polymorphism in the AKT1 gene that makes its carriers sensitive to developing psychosis with regular cannabis use. A synthesis of results from twin studies, molecular genetics, and epidemiological research outlines the many genetic and environmental factors contributing to psychosis. The interplay between these factors needs to be considered to draw a complete picture of etiology. To reach a more complete explanation of psychosis that can inform preventive strategies, future research should focus on longitudinal assessments of multiple environmental exposures within large, genotyped cohorts beginning early in life.