Cognitive behavioral models of psychosis assert the notion of cognitive mediation, in which threat-oriented subjective misinterpretations of anomalous experiences lead to increased levels of emotional distress. Thus, paranoid appraisals of auditory hallucinations often result in hypervigilance and associated anxiety. The prevalence of diagnostic comorbidity between psychosis and anxiety disorders has been shown to be considerable. Among the evidencebased psychological treatments for complex mental ill-health, Cognitive Behavioral Therapy for psychosis (CBTp) has been supported with particularly promising research outcomes. Yet, despite such encouraging empirical data, the treatment provision often remains insufficient, predominantly among individuals with more acute presentations. Likewise, literature demonstrating the actual utilization of CBTp with complex psychoses appears above all relevant to the daily clinical practice in the specialism of severe mental ill-health. This methodologically rigorous case study describes a successful implementation of CBTp undertaken with a socially withdrawn individual diagnosed with paranoid schizophrenia and comorbid agoraphobic anxiety disorder. The intervention focused on cognitive restructuring of paranoid appraisals of voices and graded behavioral exposure to anxiety-inducing stimuli. Standardized measurement, behavior frequency sampling, and subjective data were utilized to evaluate the outcomes, indicating a considerable reduction in both paranoia and associated anxiety, and an overall improvement in the client's behavioral and interpersonal functioning. The article highlights the importance of direct intellectual engagement with the content of paranoia, alongside methodically facilitated graded behavioral exposure and response prevention in the treatment of severe, socially debilitating psychoses with comorbid mood disorders.