Disrupted-In-Schizophrenia-1 (DISC1), originally identified at the breakpoint of a chromosomal translocation that is linked to a rare familial schizophrenia, has been genetically implicated in schizophrenia in other populations. Schizophrenia involves subtle cytoarchitectural abnormalities that arise during neurodevelopment, but the underlying molecular mechanisms are unclear. Here, we demonstrate that DISC1 is a component of the microtubule-associated dynein motor complex and is essential for maintaining the complex at the centrosome, hence contributing to normal microtubular dynamics. Carboxy-terminal-truncated mutant DISC1 (mutDISC1), which results from a chromosomal translocation, functions in a dominant-negative manner by redistributing wild-type DISC1 through self-association and by dissociating the DISC1-dynein complex from the centrosome. Consequently, either depletion of endogenous DISC1 or expression of mutDISC1 impairs neurite outgrowth in vitro and proper development of the cerebral cortex in vivo. These results indicate that DISC1 is involved in cerebral cortex development, and suggest that loss of DISC1 function may underlie neurodevelopmental dysfunction in schizophrenia.