In the search for the biological causes of schizophrenia and bipolar disorder, glutamate neurotransmission has emerged as one of a number of candidate processes and pathways where underlying gene deficits may be present. The analysis of chromosomal rearrangements in individuals diagnosed with neuropsychiatric disorders is an established route to candidate gene identification in both Mendelian and complex disorders. Here we describe a set of genes disrupted by, or proximal to, chromosomal breakpoints (2p12, 2q31.3, 2q21.2, 11q23.3 and 11q24.2) in a patient where chronic schizophrenia coexists with mild learning disability (US: mental retardation). Of these disrupted genes, the most promising candidate is a member of the kainate-type ionotropic glutamate receptor family, GRIK4 (KA1). A subsequent systematic case-control association study on GRIK4 assessed its contribution to psychiatric illness in the karyotypically normal population. This identified two discrete regions of disease risk within the GRIK4 locus: three single single nucleotide polymorphism (SNP) markers with a corresponding underlying haplotype associated with susceptibility to schizophrenia (P = 0.0005, odds ratio (OR) of 1.453, 95% CI 1.182-1.787) and two single SNP markers and a haplotype associated with a protective effect against bipolar disorder (P = 0.0002, OR of 0.624, 95% CI 0.485-0.802). After permutation analysis to correct for multiple testing, schizophrenia and bipolar disorder haplotypes remained significant (P = 0.0430, s.e. 0.0064 and P = 0.0190, s.e. 0.0043, respectively). We propose that these convergent cytogenetic and genetic findings provide molecular evidence for common aetiologies for different psychiatric conditions and further support the 'glutamate hypothesis' of psychotic illness.