The COVID-19 pandemic has made the world seem less predictable. Such crises can lead people to feel that others are a threat. Here, we show that the initial phase of the pandemic in 2020 increased individuals’ paranoia and made their belief updating more erratic. A proactive lockdown made people’s belief updating less capricious. However, state-mandated mask-wearing increased paranoia and induced more erratic behaviour. This was most evident in states where adherence to mask-wearing rules was poor but where rule following is typically more common. Computational analyses of participant behaviour suggested that people with higher paranoia expected the task to be more unstable. People who were more paranoid endorsed conspiracies about mask-wearing and potential vaccines and the QAnon conspiracy theories. These beliefs were associated with erratic task behaviour and changed priors. Taken together, we found that real-world uncertainty increases paranoia and influences laboratory task behaviour.