BACKGROUND: It is well established now that the incidence of schizophrenia is extremely high for several ethnic minority groups in western Europe, but there is considerable variation among groups. We investigated whether the increased risk among these groups depends upon the degree to which they perceive discrimination based on race or ethnicity. METHODS: We studied the incidence of psychotic disorders over 7 years in The Hague, a city with a large and diverse population of ethnic minorities. To compare the incidence of schizophrenic disorders (DSM IV: schizophrenia, schizophreniform disorder, schizoaffective disorder) in each ethnic minority group with the incidence in native Dutch, we computed incidence rate ratios (IRRs). Based on a population study and on rates of reported incidents of discrimination in The Hague, the degree of perceived discrimination of ethnic minority groups was rated: high (Morocco), medium (Netherlands-Antilles, Surinam and 'other non-western countries'), low (Turkey) or very low ('western or westernized countries'). RESULTS: The age- and gender-adjusted IRRs of schizophrenic disorders for ethnic minority groups exposed to high, medium, low, and very low discrimination were 4.00 (95% CI 3.00-5.35), 1.99 (1.58-2.51), 1.58 (1.10-2.27), and 1.20 (0.81-1.90), respectively. When not only schizophrenic, but all psychotic disorders were included in the analysis, the results were similar. CONCLUSIONS: These results suggest that discrimination perceived by ethnic minority groups in western Europe, or some factor closely related to it, may contribute to their increased risk of schizophrenia.