Abnormal patterns of HPA axis activation, under basal conditions and in response to stress, are found in individuals with schizophrenia and bipolar disorder. Altered glucocorticoid receptor (GR) mRNA and protein expression in the dorsolateral prefrontal cortex (DLPFC) in psychiatric illness have also been reported, but the cause of these abnormalities is not known. We quantified expression of GR mRNA transcript variants which employ different 5' promoters, in 35 schizophrenia cases, 31 bipolar disorder cases and 34 controls. We also explored whether sequence variation within the NR3C1 (GR) gene is related to GR mRNA variant expression. Total GR mRNA was decreased in the DLPFC in schizophrenia cases relative to controls (15.1%, p<0.0005) and also relative to bipolar disorder cases (8.9%, p<0.05). GR-1B mRNA was decreased in schizophrenia cases relative to controls (20.2%, p<0.05), while GR-1C mRNA was decreased in both schizophrenia and bipolar disorder cases relative to controls (16.1% and 17.2% respectively, both p<0.005). A dose-dependent effect of rs10052957 genotype on GR-1B mRNA expression was observed, where CC homozygotes displayed 18.4% lower expression than TC heterozygotes (p<0.05), and 31.8% lower expression than TT homozygotes (p<0.005). Similarly, a relationship between rs6190 (R23K) genotype and GR-1C expression was seen, with 24.8% lower expression in GG homozygotes than GA heterozygotes (p<0.01). We also observed an effect of rs41423247 (Bcl1) SNP on expression of 67 kDa GRα isoform, the most abundant GRα isoform in the DLPFC. These findings suggest possible roles for the GR-1B and GR-1C promoter regions in mediating GR gene expression changes in psychotic illness, and highlight the potential importance of sequence variation within the NR3C1 gene in modulating GR mRNA expression in the DLPFC.