Previous linkage studies have suggested a new locus for bipolar affective disorder and possibly also for schizophrenia on chromosome 10q26. We searched for allelic association and chromosome segment and haplotype sharing on chromosome 10q26 among distantly related patients with bipolar affective disorder or schizophrenia and controls from the relatively isolated population of the Faroe Islands by investigating 22 microsatellite markers from a 35 cM region. We used a combined approach with both assumption free tests and tests based on genealogical relationships. The 6.5 cM region between D10S1230 and D10S2322, which has been implied in previous linkage analyses, received some support. A search for segment sharing yielded empirical P-values around 0.02 among patients with bipolar affective disorder and around 0.03 for patients with schizophrenia. For both disorders combined allelic association yielded empirical P-values around 0.003 at marker D10S1723. A haplotype data mining approach supported haplotype sharing in this region. In another, more distal, 11.5 cM region between markers D10S214 and D10S505, which has received support in previous linkage studies, increased haplotype sharing in patients with bipolar affective disorder was supported by Fisher's exact test, tests based on genealogy and by haplotype data mining. Our findings yield some support for a risk gene for bipolar affective disorder and possibly also for schizophrenia.