Difficulties in self-other processing lie at the core of schizophrenia and pose a problem for patients' daily social functioning. In the present selective review, we provide a framework for understanding self-other integration and distinction, and impairments herein in schizophrenia. For this purpose, we discuss classic motor prediction models in relation to mirror neuron functioning, theory of mind, mimicry, self-awareness, and self-agency phenomena. Importantly, we also discuss the role of more recent cognitive expectation models in these phenomena, and argue that these cognitive models form an essential contribution to our understanding of self-other integration and distinction. In doing so, we bring together different lines of research and connect findings from social psychology, affective neuropsychology, and psychiatry to further our understanding of when and how people integrate versus distinguish self and other, and how this goes wrong in schizophrenia patients.