Extensive research has documented the presence of emotion perception deficits in schizotypy. Given that smile perception is an important component in emotion perception, it is likely that smile perception is implicated in schizotypy. The hypervigilance hallucination hypothesis propose that false-perceptual experiences are essentially related to an evolved tendency to commit false positive errors in order to avoid the costly consequences associated with false negative errors. In an attempt to link emotion perception deficits to hallucination proneness in schizotypy, previous research, has shown that high schizotypes, relative to low schizotypes commit significantly more false positive errors in recognizing threatening facial emotions. The present study set out to explore the relationship between smile perception and schizotypy factors and test the hypervigilance hallucination hypothesis in schizotypy. To these ends, 211 college students (111 females and 100 males, mean age = 19.5 years) completed the Schizotypal Personality Questionnaire and a smile recognition task embedded within a signal detection paradigm. Results suggest schizotypy is positively related to false positive errors and, perceptual sensitivity and bias are implicated in schizotypy, thus providing support for the hypervigilance hallucination hypothesis in schizotypy. These findings present some important implications in the clinical context of schizophrenia.