The relationship between substance misuse and psychosis is markedly complex, with negative impacts of substance use on physical health, behavior, psychiatric symptoms, and brain function. Few studies have focussed on the direct links between substance misuse and social cognitive functioning in psychosis. However, substance use may affect social cognition through multiple indirect paths, for instance, through early sensory processing (e.g., mismatch negativity) and autonomic nervous system regulation (e.g., heart rate variability (HRV)). These indirect paths may represent “low level” effects which may lead to upstream disruptions to social cognitive processes. Here, we first summarize the literature reporting direct associations between substance misuse and social cognition in psychosis, and then address potential indirect links between substance use and social cognition involving preattentional sensory processing and HRV. We conclude with a bottom-up framework linking these factors and suggest avenues for future investigation.