Genome-wide association studies (GWAS) have identified multiple single nucleotide polymorphisms (SNPs) as disease associated variants for schizophrenia (SCZ), bipolar disorder (BPD), or both. Although these results are statistically robust, the functional effects of these variants and their role in the pathophysiology of SCZ or BPD remain unclear. Dissecting the effects of risk genes on distinct domains of brain function can provide important biological insights into the mechanisms by which these genes may confer illness risk. This study used quantitative event related potentials to characterize the neurophysiological effects of well-documented GWAS-derived SCZ/BPD susceptibility variants in order to map gene effects onto important domains of brain function. We genotyped 199 patients with DSM-IV diagnoses of SCZ or BPD and 74 healthy control subjects for 19 risk SNPs derived from previous GWAS findings and tested their association with five neurophysiologic traits (P3 amplitude, P3 latency, N1 amplitude, P2 amplitude, and P50 sensory gating responses) known to be abnormal in psychosis. The TCF4 SNP rs17512836 risk allele showed a significant association with reduced auditory P3 amplitude (P = 0.00016) after correction for multiple testing. The same allele was also associated with delayed P3 latency (P = 0.005). Our results suggest that a SCZ risk variant in TCF4 is associated with neurophysiologic traits thought to index attention and working memory abnormalities in psychotic disorders. These findings suggest a mechanism by which TCF4 may contribute to the neurobiological basis of psychotic illness. © 2013 Wiley Periodicals, Inc.