Schizophrenia (SZ) genome-wide association studies (GWASs) have identified common risk variants in >100 susceptibility loci; however, the contribution of rare variants at these loci remains largely unexplored. One of the strongly associated loci spans MIR137 (miR137) and MIR2682 (miR2682), two microRNA genes important for neuronal function. We sequenced ∼6.9 kb MIR137/MIR2682 and upstream regulatory sequences in 2,610 SZ cases and 2,611 controls of European ancestry. We identified 133 rare variants with minor allele frequency (MAF) <0.5%. The rare variant burden in promoters and enhancers, but not insulators, was associated with SZ (p = 0.021 for MAF < 0.5%, p = 0.003 for MAF < 0.1%). A rare enhancer SNP, 1:g.98515539A>T, presented exclusively in 11 SZ cases (nominal p = 4.8 × 10(-4)). We further identified its risk allele T in 2 of 2,434 additional SZ cases, 11 of 4,339 bipolar (BP) cases, and 3 of 3,572 SZ/BP study controls and 1,688 population controls; yielding combined p values of 0.0007, 0.0013, and 0.0001 for SZ, BP, and SZ/BP, respectively. The risk allele T of 1:g.98515539A>T reduced enhancer activity of its flanking sequence by >50% in human neuroblastoma cells, predicting lower expression of MIR137/MIR2682. Both empirical and computational analyses showed weaker transcription factor (YY1) binding by the risk allele. Chromatin conformation capture (3C) assay further indicated that 1:g.98515539A>T influenced MIR137/MIR2682, but not the nearby DPYD or LOC729987. Our results suggest that rare noncoding risk variants are associated with SZ and BP at MIR137/MIR2682 locus, with risk alleles decreasing MIR137/MIR2682 expression.