Rare genetic variants of large effect can help elucidate the pathophysiology of brain disorders. Here we expand the clinical and genetic analyses of a family with a (1;11)(q42;q14.3) translocation multiply affected by major psychiatric illness and test the effect of the translocation on the structure and function of prefrontal, and temporal brain regions. The translocation showed significant linkage (LOD score 6.1) with a clinical phenotype that included schizophrenia, schizoaffective disorder, bipolar disorder, and recurrent major depressive disorder. Translocation carriers showed reduced cortical thickness in the left temporal lobe, which correlated with general psychopathology and positive psychotic symptom severity. They showed reduced gyrification in prefrontal cortex, which correlated with general psychopathology severity. Translocation carriers also showed significantly increased activation in the caudate nucleus on increasing verbal working memory load, as well as statistically significant reductions in the right dorsolateral prefrontal cortex glutamate concentrations. These findings confirm that the t(1;11) translocation is associated with a significantly increased risk of major psychiatric disorder and suggest a general vulnerability to psychopathology through altered cortical structure and function, and decreased glutamate levels.