Two approaches dominate research on the lack of awareness of illness that characterizes schizophrenia. The "deficit" approach uses standardized neuropsychological batteries to identify the neural underpinnings of intact insight; the "nondeficit" approach investigates the psychological defense mechanisms that motivate denial of illness. We adopt, instead, a cognitive neuropsychological approach to model the cognitive processes which underpin insight and which might be either damaged (because of neuropathology) or not used (because of motivational forces). We conceive of these processes in terms of a metacognitive capacity "to see ourselves as others see us." We predict that a general difficulty with adopting other mental perspectives (with "seeing the world as others do"), indexed by performance deficits on theory of mind (ToM) tasks, will impair insight in schizophrenia. Thirty schizophrenic patients (also assessed for insight) and 26 healthy controls completed a battery of ToM tasks which varied presentation modality, response mode and instruction type (picture sequencing, joke appreciation and story comprehension tasks). While patients performed more poorly than controls on all ToM tasks, impairment in patients was not concordant across tasks. ToM scores from the picture sequencing and joke appreciation tasks, and not the story comprehension task, intercorrelated significantly in patients and predicted insight. Findings support the view that insight relies upon a cognitive capacity to adopt the other perspective, which, if intact, contributes to the metacognitive capacity to reflect upon "one's own" mental health from the other perspective. Findings also suggest that the nature of perspective-taking difficulty which disrupts insight in schizophrenia is best revealed using ToM tasks with "indirect" instructions.