Auditory verbal hallucinations (AVH) are a cardinal symptom of psychosis but also occur in 6–13% of the general population. Voice perception is thought to engage an internal forward model that generates predictions, preparing the auditory cortex for upcoming sensory feedback. Impaired processing of sensory feedback in vocalization seems to underlie the experience of AVH in psychosis, but whether this is the case in nonclinical voice hearers remains unclear. The current study used electroencephalography (EEG) to investigate whether and how hallucination predisposition (HP) modulates the internal forward model in response to self-initiated tones and self-voices. Participants varying in HP (based on the Launay-Slade Hallucination Scale) listened to self-generated and externally generated tones or self-voices. HP did not affect responses to self vs. externally generated tones. However, HP altered the processing of the self-generated voice: increased HP was associated with increased pre-stimulus alpha power and increased N1 response to the self-generated voice. HP did not affect the P2 response to voices. These findings confirm that both prediction and comparison of predicted and perceived feedback to a self-generated voice are altered in individuals with AVH predisposition. Specific alterations in the processing of self-generated vocalizations may establish a core feature of the psychosis continuum.