Abstract Background The stressful minority position of transgender persons may result in a high risk of psychosis. Conflicting data suggest that the observed risk depends on setting of recruitment. We assessed the relative risk of non-affective psychotic disorder (NAPD) in a large, representative cohort of transgender persons. Methods This cohort was composed using: data on legal sex change from the Dutch population registry and data on dispensing of cross-sex hormones (route 1), and a registry of insurance claims from mental health care including persons with a diagnosis of gender identity disorder (DSM-IV) or gender dysphoria (DSM-5) (route 2). They were matched by sex at birth, calendar year and country of birth to controls from the general population. Transgender persons ( N = 5564) and controls ( N = 27 820), aged 16–60 years at 1 January 2011, were followed until the first insurance claim for NAPD in 2011–2019. Results The incidence rate ratio (IRR) of NAPD for transgender persons selected exclusively through route 1 ( N = 3859, IRR = 2.00, 95%-CI 1.52–2.63) was increased, but significantly lower than the IRRs for those selected exclusively through route 2 ( N = 694, IRR = 22.15, 95%-CI 13.91–35.28) and for those found by both routes ( N = 1011, IRR = 5.17, 95%-CI 3.57–7.49; p value for differences in IRR < 0.001). Conclusions This study supports the social defeat-hypothesis of NAPD. The results also show the presence of a substantial number of transgender persons with severe psychiatric problems who have not (yet) taken steps to gender-affirmative care.