TCF4 is involved in neurodevelopment, and intergenic and intronic variants in or close to the TCF4 gene have been associated with susceptibility to schizophrenia. However, the functional role of TCF4 at the level of gene expression and relationship to severity of core psychotic phenotypes are not known. TCF4 mRNA expression level in peripheral blood was determined in a large sample of patients with psychosis spectrum disorders (n=596) and healthy controls (n=385). The previously identified TCF4 risk variants (rs12966547 (G), rs9960767 (C), rs4309482 (A), rs2958182 (T) and rs17512836 (C)) were tested for association with characteristic psychosis phenotypes, including neurocognitive traits, psychotic symptoms and structural magnetic resonance imaging brain morphometric measures, using a linear regression model. Further, we explored the association of additional 59 single nucleotide polymorphisms (SNPs) covering the TCF4 gene to these phenotypes. The rs12966547 and rs4309482 risk variants were associated with poorer verbal fluency in the total sample. There were significant associations of other TCF4 SNPs with negative symptoms, verbal learning, executive functioning and age at onset in psychotic patients and brain abnormalities in total sample. The TCF4 mRNA expression level was significantly increased in psychosis patients compared with controls and positively correlated with positive- and negative-symptom levels. The increase in TCF4 mRNA expression level in psychosis patients and the association of TCF4 SNPs with core psychotic phenotypes across clinical, cognitive and brain morphological domains support that common TCF4 variants are involved in psychosis pathology, probably related to abnormal neurodevelopment. © 2012 Macmillan Publishers Limited All rights reserved.