G72 is a strong candidate susceptibility gene for schizophrenia and bipolar disorder, whose function remains enigmatic. Here we show that one splicing isoform of the gene (LG72) encodes for a mitochondrial protein. We also provide convergent lines of evidence that increase of endogenous or exogenous G72 levels promotes robust mitochondrial fragmentation in mammalian cell lines and primary neurons, which proceeds in a manner that does not depend on induction of apoptosis or alteration in mitochondrial transmembrane potential. Finally, we show that increase in G72 levels in immature primary neurons is accompanied by a marked increase in dendritic arborization. By contrast, we failed to confirm the originally proposed functional interaction between G72 and D-amino acid oxidase (DAO) in two tested cell lines. Our results suggest an alternative role for G72 in modulating mitochondrial function.