Background Psychotic phenomena appear to form a continuum with normal experience and beliefs, and may build on common emotional interpersonal concerns. Aims We tested predictions that paranoid ideation is exponentially distributed and hierarchically arranged in the general population, and that persecutory ideas build on more common cognitions of mistrust, interpersonal sensitivity and ideas of reference. Method Items were chosen from the Structured Clinical Interview for DSM-IV Axis II Disorders (SCID-II) questionnaire and the Psychosis Screening Questionnaire in the second British National Survey of Psychiatric Morbidity (n = 8580), to test a putative hierarchy of paranoid development using confirmatory factor analysis, latent class analysis and factor mixture modelling analysis. Results Different types of paranoid ideation ranged in frequency from less than 2% to nearly 30%. Total scores on these items followed an almost perfect exponential distribution (r = 0.99). Our four a priori first-order factors were corroborated (interpersonal sensitivity; mistrust;ideas of reference; ideas of persecution). These mapped onto four classes of individual respondents:a rare, severe, persecutory class with high endorsement of all item factors, including persecutory ideation; a quasi-normal class with infrequent endorsement of interpersonal sensitivity, mistrust and ideas of reference, and no ideas of persecution; and two intermediate classes, characterised respectively by relatively high endorsement of items relating to mistrust and to ideas of reference. Conclusions The paranoia continuum has implications for the aetiology, mechanisms and treatment of psychotic disorders, while confirming the lack of a clear distinction from normal experiences and processes.