Psychiatric disorders are genetically complex and represent the end product of multiple biological and social factors. Links between genes and disorder-related abnormalities can be effectively captured via assessment of phenotypes that are both associated with genetic effects and potentially contributory to behavioral abnormalities. Identifying intermediate or allied phenotypes as a strategy for clarifying genetic contributions to disorders has been successful in other areas of medicine and is a promising strategy for identifying susceptibility genes in complex psychiatric disorders. There is growing evidence that schizophrenia and bipolar disorder, rather than being wholly distinct disorders, share genetic risk at several loci. Further, there is growing evidence of similarity in the pattern of cognitive and neurobiological deficits in these groups, which may be the result of the effects of these common genetic factors. This review was undertaken to identify patterns of performance on neurocognitive and affective tasks across probands with schizophrenia and bipolar disorder as well as unaffected family members, which warrant further investigation as potential intermediate trait markers. Available evidence indicates that measures of attention regulation, working memory, episodic memory, and emotion processing offer potential for identifying shared and illness-specific allied neurocognitive phenotypes for schizophrenia and bipolar disorder. However, very few studies have evaluated neurocognitive dimensions in bipolar probands or their unaffected relatives, and much work in this area is needed.