Background: Cognitive Behaviour Therapy for Psychosis (CBTp) has a strong evidence base and is practised widely in the Western World. Psycho-social interventions, on the other hand, including Cognitive Behaviour Therapy (CBT) are hardly used in the low and middle income countries for psychosis. It has been suggested that adaptations in content, format and delivery are needed before CBT can be used outside the Western cultures. We describe preliminary evaluation of Culturally Adapted Cognitive Behaviour Therapy for Psychosis (CaCBTp) in in-patient settings in Lahore, Pakistan. Aims: We aimed to evaluate the efficacy of culturally adapted CBT for psychosis (CaCBTp) in Pakistan in a pilot project. Method: In a randomized controlled trial we tested CaCBTp against treatment as usual (TAU) in in-patient settings in Pakistan. Those diagnosed with schizophrenia according to the DSM-IV-TR, and who fulfilled the inclusion criteria, were recruited into the study. Patients (n = 42) were randomized into two equal groups, i.e. CaCBTp and TAU. Assessments were carried out both at the baseline and then at the end of the therapy by raters blind to the groupings. Psychopathology was measured using PANSS (Positive and Negative Syndrome Scale of Schizophrenia), PSYRATS (Psychotic Symptom Rating Scales), and the Insight Scale. Results: Patients receiving CaCBTp showed statistically significant improvement on measures of positive symptoms (p = .000), negative symptoms (p = .000), overall psychotic symptoms (p = .000), hallucinations (p = .000), delusions (p = .000) and insight (p = .000) at the end of the therapy. Conclusions: The CaCBTp was effective in reducing symptoms of psychosis and in improving insight in in-inpatient settings in Pakistan.