Increased dopamine (DA) signaling in the striatum has been a cornerstone hypothesis about psychosis for over 50 years. Increased dopamine release results in psychotic symptoms, while D2 dopamine receptor (DRD2) antagonists are antipsychotic. Recent schizophrenia GWAS identified risk-associated common variants near the DRD2 gene, but the risk mechanism has been unclear. We performed RNA-sequencing in postmortem caudate nucleus from 444 individuals and identified many new genes associated with risk for schizophrenia through genetic modulation of expression. Genetic risk for schizophrenia is associated specifically with decreased expression of the short isoform of DRD2, which encodes the presynaptic autoreceptor, and not with expression of the long isoform postsynaptic receptor. These data implicate decreased control of presynaptic DA release as a genetic mechanism of schizophrenia risk. Using a new approach based on deep neural networks, we construct caudate gene expression networks that highlight interactions involving schizophrenia risk genes and uncover potential novel therapeutic targets.One Sentence SummaryA comprehensive analysis of schizophrenia risk and of the role of DRD2 signaling within the caudate nucleus.