This paper discusses the hypothesis that the symptoms of functional psychoses can be caused by culturally structured spontaneous trances that may be reactions to environmental stress and psychological trauma. Findings are reviewed of anthropological studies of meditative trance experiences in Indian yogis characterized by divided consciousness (dissociation), religious auditory and visual hallucinations, and beliefs in their own spiritual powers. An explanation of the psychological mechanisms of meditative trance is also provided, highlighting trance-related alteration of consciousness within an Indian cultural context. It is suggested that the psychological mechanisms of meditative trance are similar in structure to spontaneous trances underlying the symptoms of some functional psychoses. Findings from cross-cultural studies are also reviewed, highlighting the effects of culture on the symptoms, indigenous diagnoses, treatments, and outcomes of functional psychoses. In non-Western cultures, transient functional psychoses with complete recovery are 10 times more common than in Western cultures. It is suggested that egocentrism and a loss of spiritual explanations for psychosis in Western cultures constructs a clinical situation in which persons with functional psychoses are treated for a biogenetic (incurable) brain disease rather than a curable spiritual illness. This difference in cultural belief systems leads to poorer outcomes for Western patients compared to non-Western patients. Recognizing cultural differences in symptoms, indigenous diagnoses, and treatment for functional psychoses can help explain the dramatic cross-cultural differences in outcome.