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Genome-wide association studies have shown that genetic variants at 2q33.1 are strongly associated with schizophrenia. However, potential causal variants in this locus and their roles in schizophrenia remain unknown. Here, we identified two functional variants (rs796364 and rs281759) that disrupt CTCF, RAD21 and FOXP2 binding at 2q33.1. We systematically investigated the regulatory mechanisms of these two variants with serial experiments, including reporter gene assays and electrophoretic mobility shift assay. Intriguingly, these two single nucleotide polymorphisms physically interacted with TYW5 and showed the most significant associations with TYW5 expression in human brain. Consistently, CRISPR-Cas9-mediated genome editing confirmed the regulatory effect of the two single nucleotide polymorphisms on TYW5 expression. Additionally, expression analysis indicated that TYW5 was significantly upregulated in brains of schizophrenia cases compared with controls, suggesting that rs796364 and rs281759 might confer schizophrenia risk by modulating TYW5 expression. We over-expressed TYW5 in mouse neural stem cells and rat primary neurons to mimic its upregulation in schizophrenia and found significant alterations in the proliferation and differentiation of neural stem cells, as well as dendritic spine density following TYW5 overexpression, indicating its important roles in neurodevelopment and spine morphogenesis. Furthermore, we independently confirmed the association between rs796364 and schizophrenia in a Chinese cohort of 8202 subjects. Finally, transcriptome analysis revealed that TYW5 affected schizophrenia-associated pathways. These lines of evidence consistently revealed that rs796364 and rs281759 might contribute to schizophrenia risk by regulating the expression of TYW5 , a gene whose expression dysregulation affects two important schizophrenia pathophysiological processes (i.e. neurodevelopment and dendritic spine formation). [ABSTRACT FROM AUTHOR]