There is considerable variation in negative and positive symptoms of psychosis, global functioning, and emotional face perception (EFP), not only in schizophrenia but also in other psychotic disorders and healthy individuals. However, EFP impairment and its association with worse symptoms and global functioning have been examined largely in the domain of schizophrenia. The present study adopted a dimensional approach to examine the association of behavioral and neural measures of EFP with symptoms of psychosis and global functioning across individuals with schizophrenia spectrum (SZ; N = 28) and other psychotic (OP; N = 29) disorders, and never-psychotic participants (NP; N = 21). Behavioral and functional MRI data were recorded as participants matched emotional expressions of faces and geometrical shapes. Lower accuracy and increased activity in early visual regions, hippocampus, and amygdala during emotion versus shape matching were associated with higher negative, but not positive, symptoms and lower global functioning, across all participants. This association remained even after controlling for group-related (SZ, OP, and NP) variance, dysphoria, and antipsychotic medication status, except in amygdala. Furthermore, negative symptoms mediated the relationship between behavioral and brain EFP measures and global functioning. This study provides some of the first evidence supporting the specific relationship of EFP measures with negative symptoms and global functioning across psychotic and never-psychotic samples, and transdiagnostically across different psychotic disorders. Present findings help bridge the gap between basic EFP-related neuroscience research and clinical research in psychosis, and highlight EFP as a potential symptom-specific marker that tracks global functioning.