The glutamic acid decarboxylase 1 (GAD1) gene is a major determinant of γ-aminobutyric acid (GABA), the most abundant inhibitory neurotransmitter modulating local neuronal circuitry. GABAergic dysfunction and expression of GAD1 have been implicated in the pathophysiology of schizophrenia, and in working memory impairment. We examined the influence of the functional GAD1 rs3749034 variant on white matter fractional anisotropy (FA), cortical thickness, and working memory performance in schizophrenia patients and healthy controls (N=197). Using transcranial magnetic stimulation with electroencephalography (TMS-EEG), we subsequently examined the effect of rs3749034 on long-interval cortical inhibition (LICI) in the dorsolateral prefrontal cortex (DLPFC) in schizophrenia patients and healthy controls (N=66). We found that the rs3749034 T-allele carrier risk group had lower voxel-wise FA in the prefrontal cortex region (PFWE-corrected<0.05) but not cortical thickness. Mixed-model regression revealed a significant effect on attentional processing and working memory across four performance measures (F1,182=11.5, P=8 × 10(-4)). FA in the prefrontal cortex was associated with digit-span performance. Voxel-wise mediation analysis revealed that the effect GAD1 on poorer digit-span performance statistically predicted the lower white matter FA (PFWE-corrected<0.05). In exploratory analysis, we found a prominent GAD1 genotype-by-diagnosis interaction on DLPFC LICI (F1,56=14.3, P=4.1 × 10(-4)). Our findings converge on variation in GAD1 gene predicting a susceptibility mechanism that affects white matter FA, GABAergic inhibitory neurotransmission in the DLPFC, and working memory performance. Furthermore, via voxel mediation of FA and TMS-EEG intervention, we provide evidence for a potentially causal mechanism through which aberrant DLPFC GABA signaling may contribute to working memory dysfunction.