Schizophrenia (SC) and bipolar disorder (BP) share many clinical features, among them psychosis. We previously identified a putative gene locus for psychosis on chromosome 18p in a sample from the Central Valley of Costa Rica (CVCR) population. The present study replicated the association to a specific allele of microsatellite marker D18S63 on 18p11.3, using a newly collected sample from the CVCR. A combined analysis of both samples, plus additional subjects, showed that this specific allele on D18S63, which lies within an intron on the TGFB-induced factor (TGIF) gene, is strongly associated (P-value=0.0005) with psychosis. Eleven additional SNP markers, spanning five genes in the region, were analyzed in the combined sample from the CVCR. Only the four SNPs within the TGIF gene were in strong linkage disequilibrium with D18S63 (D'=1.00). A specific haplotype for all five markers within the TGIF gene showed evidence of association (P-value=0.011) to psychosis. A second, distinct haplotype, containing a newly identified nonsynonymous polymorphism in exon 5 of the TGIF gene, showed a nonsignificant trend towards association to psychosis (P-value=0.077). TGIF is involved in neurodevelopment, neuron survival and controls the expression of dopamine receptors. Altogether, our results point to the possible involvement of TGIF in the pathophysiology of psychotic disorders in the CVCR population.