Both the long and short arms of chromosome 18 have been consistently identified as potential locations for schizophrenia and bipolar affective disorder susceptibility genes. We previously described the identification of two independent pericentric inversions of chromosome 18 [inv(18)(p11.31;q21.2) and inv(18)(p11.31;q21.1)] occurring in two small families in which carriers have been diagnosed with schizophrenia and bipolar affective disorder, respectively. Using fluorescence in situ hybridization on patient metaphase chromosomes we have identified the locations of all four chromosome breakpoints in the inversion carriers. Neither pericentric inversion results in a direct gene disruption. However, each inversion breakpoint has the potential to perturb local gene expression by position effect or by the separation of important regulatory (enhancer) sequences from the core gene sequences. Five genes in the localities of the breakpoints have been identified as good candidates for the genetic basis of psychiatric illness in these families; TTMA, a novel membrane spanning protein; TCF4, a basic helix-loop-helix transcription factor; DLGAP1, an interactor of the PSD-95 synaptic protein; and ARKL1 and ARKL2, novel members of the ubiquitin ligase gene family.