DISC1, a strong genetic candidate for psychiatric illness, is a molecular scaffold residing in multiple subcellular compartments, where it regulates the function of interacting proteins with key roles in neurodevelopment and plasticity. Both common and rare DISC1 missense variants are associated with risk of mental illness and/or brain abnormalities in healthy carriers, but the underlying mechanisms are unclear. In this thesis, I initially examine the effect of a panel of common and rare single amino acid substitutions on DISC1 subcellular targeting, establishing that the rare mutation R37W and the common variant L607F disrupt DISC1 nuclear targeting in a dominant-negative fashion. This finding predicts that DISC1 nuclear expression is severely impaired in 37W and 607F carriers. In addition, I show that the L607F substitution results in aberrant cytoplasmic and cytoskeletal distribution of DISC1. In the nucleus, DISC1 interacts with the transcription factor ATF4, which is involved in the regulation of cellular stress responses and memory consolidation. Here I show that at basal cAMP levels, wild-type DISC1 strongly inhibits the transcriptional activity of ATF4, and this effect is ablated by 37W and 607F, most likely as a consequence of their defective nuclear targeting. 607F additionally reduces DISC1/ATF4 interaction, which likely contributes to its weakened inhibitory effect. I also demonstrate that DISC1 modulates transcriptional responses to endoplasmic reticulum stress, and that this modulatory effect is also ablated by 37W and 607F. By providing evidence that single amino acid substitutions of DISC1 associated with psychiatric illness impair its regulatory function on ATF4-dependent transcription, I highlight a potential mechanism by which these protein variants may impact on molecular pathways underlying cognition and stress responses, two processes of direct relevance to psychiatric disease.