Ankyrin-3 (ANK3) is one of the few genes that have been consistently identified as associated with bipolar disorder by multiple genome-wide association studies. However, the exact molecular basis of the association remains unknown. A rare loss-of-function splice-site SNP (rs41283526*G) in a minor isoform of ANK3 (incorporating exon ENSE00001786716) was recently identified as protective of bipolar disorder and schizophrenia. This suggests that an elevated expression of this isoform may be involved in the etiology of the disorders. In this study, we used novel approaches and data sets to test this hypothesis. First, we strengthen the statistical evidence supporting the allelic association by replicating the protective effect of the minor allele of rs41283526 in three additional large independent samples (meta-analysis p-values: 6.8E–05 for bipolar disorder and 8.2E–04 for schizophrenia). Second, we confirm the hypothesis that both bipolar and schizophrenia patients have a significantly higher expression of this isoform than controls (p-values: 3.3E–05 for schizophrenia and 9.8E–04 for bipolar type I). Third, we determine the transcription start site for this minor isoform by Pacific Biosciences sequencing of full-length cDNA and show that it is primarily expressed in the corpus callosum. Finally, we combine genotype and expression data from a large Norwegian sample of psychiatric patients and controls, and show that the risk alleles in ANK3 identified by bipolar disorder GWAS are located near the transcription start site of this isoform and are significantly associated with its elevated expression. Together, these results point to the likely molecular mechanism underlying ANK3´s association with bipolar disorder.