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Differentiation of self, which is understood to be the psychological individuation of a person from their parental figures, is considered a key factor in the origin of severe psychopathology. In this study, we aim to explore the ways in which the process of differentiation of self develops in people with various severe mental disorders, examining its impact on social functioning together with diagnosis, current symptoms, illness variables, and sociodemographic features. One hundred thirty patients (45 diagnosed with schizophrenia, 44 with bipolar disorder, and 41 with major depressive disorder) and 45 controls were assessed using the Differentiation of Self-Inventory-Revised, the Family of Origin Scale, the 90 Symptom Check List-Revised, and the Social Adaptation Self-Evaluation Scale. As for differentiation of self, patients showed lower I-position and poorer emotional reactivity than controls. Additionally, emotional reactivity was poorer for patients with schizophrenia and bipolar disorder than for those with major depressive disorder; and a poor emotional cutoff (remoteness) was evidenced only in schizophrenia. Individuals with schizophrenia and bipolar disorder had lower capacity for differentiation than controls, and those with schizophrenia were less differentiated than those with major depressive disorders. Among the main predictors of poor social functioning were low differentiation of self and low differentiation from the family of origin rather than any specific clinical diagnosis. These findings suggest a possible utility of using the concept of differentiation of self as a psychological marker to classify severe mental disorders. Critically, social functioning may improve with interventions focused on differentiation of self.