This study tested the hypothesis that the presence and characteristics of naturally occurring involuntary imagery would be related to poorer context-dependent spatial memory and higher levels of proneness to psychotic experiences. Poorer contextual memory was also predicted to be associated with a greater sense of "nowness". Participants completed a virtual environment task that assessed contextual memory through responses that required allocentric and egocentric processing of virtual stimuli. Two questionnaires assessing predisposition to psychotic experiences were employed. Finally, participants completed an interview that required details of recent, naturally occurring involuntary images. Reports of involuntary imagery were associated with greater proneness to psychotic experiences but not with memory. In those participants who reported imagery, however, poorer memory performance was associated with more vivid and detailed intrusive imagery. Poorer contextual memory was specifically associated with a greater sense of "nowness". Possible links between contextual memory and proneness to psychosis are discussed.