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Genome-wide association studies have identified 10q24.32 as a robust schizophrenia risk locus. Here we identify a regulatory variant (rs10786700) that disrupts binding of transcription factors at 10q24.32. We independently confirmed the association between rs10786700 and schizophrenia in a large Chinese cohort (n = 11 547) and uncovered the biological mechanism underlying this association. We found that rs10786700 resides in a super-enhancer element that exhibits dynamic activity change during the development process and that the risk allele (C) of rs10786700 conferred significant lower enhancer activity through enhancing binding affinity to repressor element-1 silencing transcription factor (REST). CRISPR-Cas9-mediated genome editing identified SUFU as a potential target gene by which rs10786700 might exert its risk effect on schizophrenia, as deletion of rs10786700 downregulated SUFU expression. We further investigated the role of Sufu in neurodevelopment and found that Sufu knockdown inhibited proliferation of neural stem cells and neurogenesis, affected molecular pathways (including neurodevelopment-related pathways, PI3K-Akt and ECM-receptor interaction signalling pathways) associated with schizophrenia and altered the density of dendritic spines. These results reveal that the functional risk single nucleotide polymorphism rs10786700 at 10q24.32 interacts with REST synergistically to regulate expression of SUFU , a novel schizophrenia risk gene which is involved in schizophrenia pathogenesis by affecting neurodevelopment and spine morphogenesis. [ABSTRACT FROM AUTHOR]