A recent 'mega-analysis' combining genome-wide association study data from over 40,000 individuals identified novel genetic loci associated with schizophrenia (SCZ) at genome-wide significance level. The strongest finding was a locus within an intron of a putative primary transcript for microRNA MIR137. In the current study, we examine the impact of variation at this locus (rs1625579, G/T; where T is the common and presumed risk allele) on brain activation during a sentence completion task that differentiates individuals with SCZ, bipolar disorder (BD), and their relatives from controls. We examined three groups of individuals performing a sentence completion paradigm: (i) individuals at high genetic risk of SCZ (n=44), (ii) individuals at high genetic risk of BD (n=90), and (iii) healthy controls (n=81) in order to test the hypothesis that genotype at rs1625579 would influence brain activation. Genotype groups were assigned as 'RISK-' for GT and GG individuals, and 'RISK+' for TT homozygotes. The main effect of genotype was significantly greater activation in the RISK- individuals in the posterior right medial frontal gyrus, BA 6. There was also a significant genotype(*)group interaction in the left amygdala and left pre/postcentral gyrus. This was due to differences between the controls (where individuals with the RISK- genotype showed greater activation than RISK+ subjects) and the SCZ high-risk group, where the opposite genotype effect was seen. These results suggest that the newly identified SCZ locus may influence brain activation in a manner that is partly dependent on the presence of existing genetic susceptibility for SCZ.