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The relationship between self‐esteem and psychotic symptoms is unclear. We have conducted a secondary analysis of an 18‐month study of 66 people with schizophrenia to investigate the longitudinal relationship between self‐esteem and psychotic symptoms. We investigated associations between positive and negative psychotic symptoms and self‐esteem at baseline, after controlling for the effect of mood and other covariates using multiple regression. We then investigated the relationship between change in symptom measures and change in self‐esteem. We found ideas of grandeur significantly associated with self‐esteem at baseline. In the longitudinal regression analysis we found that a reduction in severity of negative symptoms was significantly associated with improvement in self‐esteem (and vice versa). These findings have therapeutic implications.