Electroencephalography (EEG) has been proposed as a neurophysiological biomarker to delineate psychotic disorders. It is known that increased delta and decreased alpha, which are apparent in psychosis, are indicative of inappropriate arousal state, which leads to reduced ability to attend to relevant information. On this premise, we investigated delta/alpha frequency activity, as this ratio of frequency activity may serve as an effective neurophysiological biomarker. The current study investigated differences in delta/alpha frequency activity, in schizophrenia (SCZ), bipolar I disorder with psychotic features and methamphetamine-induced psychosis. One hundred and nine participants, including individuals with SCZ (n = 28), bipolar I disorder with psychotic features (n = 28), methamphetamine-induced psychotic disorder (MPD) (n = 24) and healthy controls (CON, n = 29). Diagnosis was ascertained with the Structured Clinical Interview for Diagnostic and Statistical Manual of Mental Disorders, 4th Edition disorders and current medication was recorded. EEG was undertaken in three testing conditions: resting eyes open, resting eyes closed and during completion of a simple cognitive task (visual continuous performance task). EEG delta/alpha frequency activity was investigated across these conditions. First, delta/alpha frequency activity during resting eyes closed was higher in SCZ and MPD globally, when compared to CON, then lower for bipolar disorder (BPD) than MPD for right hemisphere. Second, delta/alpha frequency activity during resting eyes open was higher in SCZ, BPD and MPD for all electrodes, except left frontal, when compared to CON. Third, delta/alpha frequency activity during the cognitive task was higher in BPD and MPD for all electrodes, except left frontal, when compared to CON. Assessment of EEG delta/alpha frequency activity supports the delineation of underlying neurophysiological mechanisms present in psychotic disorders, which are likely related to dysfunctional thalamo-cortical connectivity. Delta/alpha frequency activity may provide a useful neurophysiological biomarker to delineate psychotic disorders.