Pareidolia is the tendency to see meaningful or familiar forms in ambiguous sensory information, such as seeing faces, animals or people in clouds, shadows or irregular textures. It is a normal perceptual phenomenon and should not be considered a pathological one. However, increased pareidolic responding has been reported in schizophrenia and as a result might provide a useful behavioral paradigm to investigate abnormalities in perceptual organization, predictive processing, salience attribution, and reality testing. This narrative review focuses on pareidolia in childhood-onset schizophrenia (COS) and, where relevant, the broader category of early-onset schizophrenia (EOS). A diagnostic clarification is needed: childhood schizophrenia is not a separate diagnostic category in DSM-5-TR or ICD-11. COS is a clinical and research term for schizophrenia with onset before 13 years, and EOS is usually for schizophrenia with onset before 18 years. COS is very rare, with estimates being as low as 0.04% of children, while schizophrenia more generally occurs in late adolescence and early adulthood. Recent literature on pareidolia, visual illusions, perceptual organization, visual distortions, hallucinations and predictive processing has been reviewed in detail. It is well known that children and adolescents with schizophrenia spectrum disorders may experience visual abnormalities and visual interpretation, but no direct evidence has been presented for pareidolia in COS. However, pareidolia should be viewed as a potentially informative perceptual phenomenon rather than a diagnostic feature of COS. Future work can explore whether changes in pareidolic responses can help to understand how sensory prediction, perceptual organization, salience attribution and reality monitoring in early psychosis develop.