Objective Group reading activities are often reported to be helpful in a variety of psychiatric conditions. However, data on the effects of structured reading rehabilitation activities, in both hospital and community settings for patients with psychosis, are still scarce. Our aim was to investigate the effects on clinical status, disability, psychosocial functioning and cognitive functioning of a structured group reading activity, in a sample of hospitalized patients with psychosis. Methods We enrolled 41 consecutive patients with psychosis and randomly assigned them to a structured group reading programme. For all included patients, we psychometrically evaluated clinical symptomatology, psychosocial functioning and disability, as well as cognitive functioning. All evaluations were repeated at a 6‐month follow‐up. Repeated‐measure multiple analyses of variance were used to test the effect of the group reading activities on the clinical, psychosocial and cognitive measures. Results We found that, after 6 months from discharge, structured group reading activities induced a statistically significant improvement of cognitive (p < 0.007) and psychosocial (p < 0.008) functioning in patients with psychosis and reduced their disability (p < 0.005), with respect to the control group. Furthermore, such programmes are easy to implement and were perceived as extremely ‘interesting’ and ‘useful’ by patients with psychosis. Conclusions Rehabilitation programmes focusing on group reading activities should be regarded as a valid psychosocial rehabilitation tool for psychotic patients with severe mental disability. Copyright © 2013 John Wiley & Sons, Ltd. Key Practitioner Message A structured group reading programme induced a significant symptomatological cognitive and psychosocial amelioration in hospitalized patients with psychosis. The improvement was sustained also at the 6‐month follow‐up, with respect to the control group. Structured group reading activities are perceived, by severely ill psychiatric patients, as highly useful, interesting and pleasant, while they are relatively easy to implement.