Behavior analytic methods were applied to the assessment and treatment of the problem behaviors of an 8-year-old male classified as having moderate mental retardation and atypical psychosis. Functional assessment procedures demonstrated that verbal behaviors diagnosed as hallucinatory were affected by environmental contingencies. Next, a multi-element/multiple baseline design was used to evaluate the independent and interactive effects of contingency management and pharmacologic interventions on three dependent variables: (1) psychotic speech; (2) aggressive-disruptive behavior; and (3) appropriate speech. Results indicated that contingency management without haloperidol was the most effective treatment for all inappropriate and appropriate behaviors. These results are important in that behavior analytic methods were shown to have utility for: (1) assessing the functional relationship between environmental contingencies and behaviors related to differential diagnosis; and (2) evaluating the independent and interactive effects of behavioral and pharmacologic treatments.