Auditory verbal hallucinations (AVH) are often distressing symptoms of several neuropsychiatric conditions, including schizophrenia. Using a Markov decision process formulation of active inference, we develop a novel model of AVH as false (positive) inference. Active inference treats perception as a process of hypothesis testing, in which sensory data are used to disambiguate between alternative hypotheses about the world. Crucially, this depends upon a delicate balance between prior beliefs about unobserved (hidden) variables and the sensations they cause. A false inference that a voice is present, even in the absence of auditory sensations, suggests that prior beliefs dominate perceptual inference. Here we consider the computational mechanisms that could cause this imbalance in perception. Through simulation, we show that the content of (and confidence in) prior beliefs depends on beliefs about policies (here sequences of listening and talking) and on beliefs about the reliability of sensory data. We demonstrate several ways in which hallucinatory percepts could occur when an agent expects to hear a voice in the presence of imprecise sensory data. This model expresses, in formal terms, alternative computational mechanisms that underwrite AVH and, speculatively, can be mapped onto neurobiological changes associated with schizophrenia. The interaction of action and perception is important in modeling AVH, given that speech is a fundamentally enactive and interactive process-and that hallucinators often actively engage with their voices.