Numerous genetic studies associated the Neuregulin 1 (NRG1) Icelandic haplotype (HAP(ice)), and its single nucleotide polymorphism SNP8NRG243177 [T/T], with schizophrenia. Because SNP8NRG243177 [T/T] has characteristics of a functional polymorphism that maps close to NRG1 type IV coding sequences, our initial goal was to map precisely the human type IV transcription initiation site. We determined that the initiation site is 23 bp upstream of the previously reported type IV exon, and that no other transcripts map to the SNP8NRG243177 region. Because NRG1 type IV transcripts are specific to human, we isolated full-length NRG1 type IV cDNAs from human hippocampi and expressed them in non-neural cells and dissociated rat hippocampal neurons to study protein expression, processing and function. Using an antiserum we generated against the NRG1 type IV-specific N-terminus, we found that the protein is targeted to the cell surface where PKC activation promotes its cleavage and release of the extracellular domain. Conditioned medium derived from type IV expressing cells stimulates ErbB receptor phosphorylation, as well as downstream Akt and Erk signaling, demonstrating that NRG1 type IV possesses biological activity similar to other releasable NRG1 isoforms. To study the subcellular targeting of distinct isoforms, neurons were transfected with the Ig-domain-containing NRG1 types I and IV, or the cysteine-rich domain type III isoform. Three dimensional confocal images from transfected neurons indicate that, whereas all isoforms are expressed on somato-dendritic membranes, only the type III-cysteine-rich domain isoform is detectable in distal axons. These results suggest that NRG1 type IV expression levels associated with SNP8NRG243177 [T/T] can selectively modify signaling of NRG1 released from somato-dendritic compartments, in contrast to the type III NRG1 that is also associated with axons.