Research on serious mental disorders, particularly psychosis, has revealed highly variable symptom profiles and developmental trajectories prior to illness-onset. As Dante Cicchetti pointed out decades before the term “transdiagnostic” was widely used, the pathways to psychopathology emerge in a system involving equifinality and multifinality. Like most other psychological disorders, psychosis is associated with multiple domains of risk factors, both genetic and environmental, and there are many transdiagnostic developmental pathways that can lead to psychotic syndromes. In this article, we discuss our current understanding of heterogeneity in the etiology of psychosis and its implications for approaches to conceptualizing etiology and research. We highlight the need for examining risk factors at multiple levels and to increase the emphasis on transdiagnostic developmental trajectories as a key variable associated with etiologic subtypes. This will be increasingly feasible now that large, longitudinal datasets are becoming available and researchers have access to more sophisticated analytic tools, such as machine learning, which can identify more homogenous subtypes with the ultimate goal of enhancing options for treatment and preventive intervention.