People can derive health benefits from social group memberships. However, joining groups can be difficult for people experiencing psychosis due to the social impacts of the condition and public and internalised stigma. We interviewed a diverse group of 26 people experiencing psychosis and explored through thematic analysis their perceptions of how psychosis influenced social identity processes. Participants confirmed both the impact of psychosis on group processes and the value of group memberships for wellbeing. Empathy, understanding, and lack of judgement were perceived to be critical for group formation. Participants sought social validation in both pre-existing and new relationships, including from others experiencing psychosis. A novel finding was the compartmentalising of the psychosis identity to facilitate periods of either greater connection or social mobility dependent on current mental state. Thus, this study suggests nuance to the application of the Social Cure for a highly stigmatised, yet fluctuating, condition such as psychosis.