Abstract Objective Numerous research studies have demonstrated an association between higher symptom severity and cognitive impairment with poorer social functioning in first-episode psychosis (FEP). By contrast, the influence of subjective experiences, such as social relatedness and self-beliefs, has received less attention. Consequently, a cohesive understanding of how these variables interact to influence social functioning is lacking. Method We used structural equation modeling to examine the direct and indirect relationships among neurocognition (processing speed) and social cognition, symptoms, and social relatedness (perceived social support and loneliness) and self-beliefs (self-efficacy and self-esteem) in 170 individuals with FEP. Results The final model yielded an acceptable model fit (χ² = 45.48, comparative fit index = 0.96; goodness of fit index = 0.94; Tucker–Lewis index = 0.94; root mean square error of approximation = 0.06) and explained 45% of social functioning. Negative symptoms, social relatedness, and self-beliefs exerted a direct effect on social functioning. Social relatedness partially mediated the impact of social cognition and negative symptoms on social functioning. Self-beliefs also mediated the relationship between social relatedness and social functioning. Conclusions The observed associations highlight the potential value of targeting social relatedness and self-beliefs to improve functional outcomes in FEP. Explanatory models of social functioning in FEP not accounting for social relatedness and self-beliefs might be overestimating the effect of the illness-related factors.