Recent advances have facilitated the use of blood-derived RNA to conduct genomic analyses of human diseases. This emerging technology represents a rigorous and convenient alternative to traditional tissue biopsy-derived RNA, as it allows for larger sample sizes, better standardization of technical procedures, and the ability to non-invasively profile human subjects. In the present pilot study, we have collected RNA from blood of patients diagnosed with schizophrenia or bipolar disorder (BPD), as well as normal control subjects. Using microarray analysis, we found that each disease state exhibited a unique expressed genome signature, allowing us to discriminate between the schizophrenia, BPD, and control groups. In addition, we validated changes in several potential biomarker genes for schizophrenia and BPD by RT-PCR, and some of these were found to code to chromosomal loci previously linked to schizophrenia. Linear and non-linear combinations of eight putative biomarker genes (APOBEC3B, ADSS, ATM, CLC, CTBP1, DATF1, CXCL1, and S100A9) were able to discriminate between schizophrenia, BPD, and control samples, with an overall accuracy of 95%–97% as indicated by receiver operating characteristic (ROC) curve analysis. We therefore propose that blood cell-derived RNA may have significant value for performing diagnostic functions and identifying disease biomarkers in schizophrenia and BPD. © 2005 Wiley-Liss, Inc.