Hallucinations are caused by the Postal Dude's head wound, which in turn was caused by a self-inflicted gunshot at the end of Postal 2. The first hallucination occurs in the Hospital, when Postal Dude is beginning to exit it after donating semen in the Sample Drop room. Throughout the course of the game, they will continue periodically when a certain task is completed or when a certain area is entered. Initially in each hallucination, Postal Dude will usually say things such as "Ah...brain...hurting...stupid head wound!" and a high-pitched noise will play coupled with the screen flashing. Following this, the world around Dude changes, with surfaces having obscure, moving textures and materials. Gary Coleman-like creatures will attack him with Scissors and Grenades, and some will charge at him with Diseased cow heads and explode into clouds of anthrax. The last hallucination Postal Dude has is when he is coming off The Bridge to approach his car and trailer. Unlike most hallucinations, however, this one involves zombies and a mad-cow infected Mike J, who serves as the final boss in the game. Upon defeating Mike J, the hallucination stops and Dude proceeds in escaping Paradise as the Thermo-nuclear warhead explodes.
- Some hallucinations are a reference to the Silent Hill series.