Summary Schizophrenia and bipolar disorder are among the most clinically defined but least understood psychiatric disorders. We have uncovered a novel pathway of stress regulation in the brain mediated by the master transcriptional repressor REST/NRSF. Our preliminary studies suggest that the REST pathway may be dysregulated in the brains of patients with schizophrenia and bipolar disorder, and that treating bipolar patients with lithium, a drug that activates REST, restores homeostasis. This project will address a novel conceptual paradigm that might underlie both disorders involving dysregulation of a stress response system in the brain that is regulated by REST. Initially, we will determine if REST function is altered in neurons derived from induced progenitor stem (iPS) cells of patients and in isogenic iPS cell lines in which we have introduced a schizophrenia-causing genetic variant using the CRISPR-Cas9 system. We will then determine if conditional knockout mouse models of REST dysfunction in specific neuronal subpopulations recapitulate behavioral, metabolic and physiological changes associated with schizophrenia and bipolar disorder. Finally, we will define transcriptome changes in the brains of schizophrenic and bipolar patients at single neuron resolution to ascertain the role of REST and other transcriptional regulators in specific neuronal cell types. To accomplish this goal, we will advance a new technology we have recently developed called fluorescence in situ sequencing of RNA (FISSEQ). In contrast to conventional sequencing, which requires isolation of DNA or RNA, FISSEQ sequences RNA in intact tissue, bringing together the depth of transcriptome-wide RNA sequencing with the resolution of single molecule in situ RNA localization. FISSEQ can also be multiplexed with other data streams, particularly proteomics, enabling multidimensional interrogation at single cell resolution. FISSEQ will be used to derive reference transcriptomes for identified neural cell types in the human and mouse brain. Differences between reference transcriptomes and transcriptomes of patients with schizophrenia and bipolar disorder may implicate REST or other transcription factors, and provide a systems- level view of the central regulatory pathways. This will be complemented by transcriptome analysis in mice genetically engineered to delete or overexpress the REST gene in specific neuronal populations. Although this approach will be used to explore psychiatric disorders, once developed, it could be rapidly employed to elucidate altered genome regulation in any brain disorder. These studies will bring together two principal investigators with complementary areas of expertise in a multidisciplinary approach to understand psychiatric disorders and advance single cell transcriptome analysis of the brain.