The 67 and 65 kDa isoforms of glutamic acid decarboxylase, the key enzymes for GABA biosynthesis, are expressed at altered levels in postmortem brain of subjects diagnosed with schizophrenia and related disorders, including autism and bipolar illness. The predominant finding is a decrease in GAD67 mRNA levels, affecting multiple brain regions, including prefrontal and temporal cortex. Postmortem studies, in conjunction with animal models, identified several mechanisms that contribute to the dysregulation of GAD67 in cerebral cortex. These include disordered connectivity formation during development, abnormal expression of Reelin and neural cell adhesion molecule (NCAM) glycoproteins, defects in neurotrophin signaling and alterations in dopaminergic and glutamatergic neurotransmission. These mechanisms are likely to operate in conjunction with genetic risk factors for psychosis, including sequence polymorphisms residing in the promoter of GAD1 (2q31), the gene encoding GAD67. We propose an integrative model, with multiple molecular and cellular mechanisms contributing to transcriptional dysregulation of GAD67 and cortical dysfunction in psychosis.