Aim To investigate group metacognitive training and cognitive–behavioural therapy (MCT/CBT) prospectively in a young population with various psychiatric disorders, including psychotic and mood disorders. Methods This was a prospective study to investigate the effectiveness of group MCT/CBT on quality of life, psychotic symptoms, depression, self‐esteem, perceived stress, social function and social cognition. The objective measures included the Positive and Negative Syndrome Scale (PANSS), clinical global impression (CGI), personal and social performance scale for social functioning, a computerized continuous performance test for sustained attention and a computerized emotional recognition test for social cognition. Self‐report measures administered included the Subjective Well‐being under Neuroleptics for quality of life, Ambiguous Intentions Hostility Questionnaire for suspiciousness, Drug Attitude Inventory, Beck Depression Inventory, Perceived Stress Scale, Brief Resilience Scale, Rosenberg Self‐esteem Scale and visual analogue scale for the EQ‐5D. Results Among 110 young patients with early psychosis and mood disorders who participated, 82 (74.5%) completed the study. Social functioning, quality of life, self‐esteem, resilience, depression, suspiciousness, social cognition, sustained attention and scores on the PANSS and CGI improved significantly after completing group MCT/CBT. Perceived stress, resilience and suspiciousness improved significantly only in participants with a non‐psychotic disorder. Improvements in subjective well‐being of the participants were associated with increases in self‐esteem and resilience and decreases in depression and perceived stress. Conclusions Our study showed that group transdiagnostic MCT/CBT for young patients with mental illness improved subjective wellbeing, self‐esteem, resilience, social cognition and social functioning and significantly diminished suspiciousness, perceived stress and depression.