A susceptibility locus for bipolar disorder was previously localized to chromosome 4q35 by genetic linkage analysis. We have applied a positional cloning strategy, combined with association analysis and provide evidence that a cadherin gene, FAT, confers susceptibility to bipolar disorder in four independent cohorts (allelic P-values range from 0.003 to 0.024). In two case–control cohorts, association was identified among bipolar cases with a family history of psychiatric illness, whereas in two cohorts of parent–proband trios, association was identified among bipolar cases who had exhibited psychosis. Pooled analysis of the case–control cohort data further supported association (P = 0.0002, summary odds ratio = 2.31, 95% CI: 1.49–3.59). We localized the bipolar-associated region of the FAT gene to an interval that encodes an intracellular EVH1 domain, a domain that interacts with Ena/VASP proteins, as well as putative β-catenin binding sites. Expression of Fat, Catnb (β-catenin), and the three genes (Enah, Evl and Vasp) encoding the Ena/VASP proteins, were investigated in mice following administration of the mood-stabilizing drugs, lithium and valproate. Fat was shown to be significantly downregulated (P = 0.027), and Catnb and Enah were significantly upregulated (P = 0.0003 and 0.005, respectively), in response to therapeutic doses of lithium. Using a protein interaction map, the expression of genes encoding murine homologs of the FAT (ft)-interacting proteins was investigated. Of 14 interacting molecules that showed expression following microarray analysis (including several members of the Wnt signaling pathway), eight showed significantly altered expression in response to therapeutic doses of lithium (binomial P = 0.004). Together, these data provide convergent evidence that FAT and its protein partners may be components of a molecular pathway involved in susceptibility to bipolar disorder.