Objective: We sought to determine what cognitive mechanisms contribute to the development of positive symptomatology in schizophrenia. Given the conversion rate (40% in some studies) for individuals with prominent schizotypal traits, we hypothesized that schizotypal traits and fantasy proneness would predict subthreshold positive symptomatology. Due to the lack of research on predictors of psychosis in schizotypal personality disorder, we further hypothesized that an externalizing bias would be a predictor, in keeping with the schizophrenia literature. Method: Undergraduate students (N = 225) completed self-report measures to assess schizotypal traits, an externalizing bias, fantasy proneness, and depression, with subthreshold positive symptomatology as the outcome variable. Results: Schizotypal traits, fantasy proneness, and depressive symptoms were significant predictors, explaining 40.9% of the variance. An externalizing bias was not a significant predictor. Fantasy proneness was most predictive, followed by schizotypal traits and depressive symptoms. Conclusion: An externalizing bias, while a predictor of psychosis in schizophrenia, may not be associated with subthreshold positive symptomatology, possibly because an externalizing bias is typically associated with hallucinations, rather than delusions. Delusional ideation may be more common than perceptual abnormalities in this sample. Future research should consider what components of depression are predictive of psychosis.