Recent postmortem studies have been suggesting that a defect of GABAergic neurotransmission might occur in the corticolimbic system of subjects with schizophrenia and bipolar disorder. To explore this possibility, a method for immunolocalizing the 65 kdalton isoform of glutamate decarboxylase (GAD 65) has been developed and applied to the anterior cingulate (ACCx) and prefrontal (PFCx) cortices of 12 normal controls (CONs), 12 schizophrenics (SZs) and 5 manic depressive (MDs) subjects. A computer-assisted technique was employed under strictly blind conditions to determine the density of GAD 65-IR terminals in apposition with pyramidal (PNs) and nonpyramidal (NPs) neurons and in neuropil (NPL) of layers II, III, V and VI of each cortical region. For SZs, no difference in the numerical density of GAD 65-IR terminals in contact with either PNs or NPs or in NPL of layers II–VI in ACCx or PFCx was detected. There were also no differences in the size of either PNs and NPs that could have influenced the nature of these findings. Using a pixel count analysis, the size of IR terminals was, however, found to be increased in layers II (10.3%) and III (15.8%) of SZs, but only in subjects treated with neuroleptic drugs. For MDs, the density of GAD 65-IR terminals was significantly reduced in all four layers of ACCx, but these differences were most significant in layers II (27.8%) and III (37.2%), whether or not the subjected were treated with neuroleptics. In PFCx, the MDs showed similar differences in terminal density for PNs and NPs but not neuropil in the four laminae examined. The MD group showed no differences in either the size of cell bodies or IR terminals. Age and PMI did not account for any of the differences between the CONs vs SZs and MDs. Overall, the results of this study, though preliminary, suggest that there may be complex changes in GABAergic terminals in SZ and MD, ones that may vary with respect to primary diagnosis and neuroleptic exposure.