INTRODUCTION. Ample evidence already shows that theory of mind (ToM) is impaired in people with schizophrenia. Our aim was to critically review this literature. METHOD. We completed a selected review of the research literature on ToM in schizophrenia. RESULTS. Gaps in ToM research were identified. A specific relationship between impaired ToM and paranoid delusions, although intuitively reasonable from a theoretical basis, has only been demonstrated in a few studies. Psychometric properties of ToM tasks employed in these studies may be a confounding factor in drawing conclusions about the relationship. Because most ToM measures have focused on the third-person perspective, participants are not actively interacting. The tasks fail to capture the cognitive demands faced by individuals in real-life situations, and, in effect, are not a direct measure of ToM. CONCLUSIONS. Potential research areas are discussed. Since game theoretical paradigms require the direct involvement of the first person and situate the participant's interpersonal reasoning within an interactive context, they provide more ecologically valid experimental platforms than conventional questionnaire measures to assess ToM in schizophrenia research.