Background. Schizophrenia (SZ) and bipolar disorder (BD) have both been associated with reduced microstructural white matter integrity using, as a proxy, fractional anisotropy (FA) detected using diffusion tensor imaging (DTI). Genetic susceptibility for both illnesses has also been positively correlated in recent genome-wide association studies with allele A (adenine) of single nucleotide polymorphism (SNP) rs1344706 of the ZNF804A gene. However, little is known about how the genomic linkage disequilibrium region tagged by this SNP impacts on the brain to increase risk for psychosis. This study aimed to assess the impact of this risk variant on FA in patients with SZ, in those with BD and in healthy controls. Methods. 230 individuals were genotyped for the rs1344706 SNP and underwent DTI. We used tract-based spatial statistics (TBSS) followed by an analysis of variance, with threshold-free cluster enhancement (TFCE), to assess underlying effects of genotype, diagnosis and their interaction, on FA. Results. As predicted, statistically significant reductions in FA across a widely distributed brain network (p < 0.05, TFCE-corrected) were positively associated both with a diagnosis of SZ or BD and with the double (homozygous) presence of the ZNF804A rs1344706 risk variant (A). The main effect of genotype was medium (d = 0.48 in a 44,054-voxel cluster) and the effect in the SZ group alone was large (d = 1.01 in a 51,260-voxel cluster), with no significant effects in BD or controls, in isolation. No areas under a significant diagnosis by genotype interaction were found. Discussion. We provide the first evidence in a predominantly Caucasian clinical sample, of an association between ZNF804A rs1344706 A-homozygosity and reduced FA, both irrespective of diagnosis and particularly in SZ (in overlapping brain areas). This suggests that the previously observed involvement of this genomic region in psychosis susceptibility, and in impaired functional connectivity, may be conferred through it inducing abnormalities in white matter microstructure.