Several correlated phenotypes, alcohol dependence, major depressive syndrome, and an endophenotype of electrophysiological measurements, event-related oscillations (EROs), have demonstrated linkage on the long arm of chromosome 7. Recently, we reported both linkage and association between polymorphisms in the gene encoding the muscarinic acetylcholine receptor M2 (CHRM2) and EROs. In this study, we evaluated whether genetic variation in the CHRM2 gene is also a risk factor for the correlated clinical characteristics of alcoholism and depression. The CHRM2 gene contains a single coding exon and a large 5' untranslated region encoded by multiple exons that can be alternatively spliced. Families were recruited through an alcohol dependent proband, and multiplex pedigrees were selected for genetic analyses. We examined 11 single nucleotide polymorphisms (SNPs) spanning the CHRM2 gene in these families. Using the UNPHASED pedigree disequilibrium test (PDTPHASE), three SNPs (one in intron 4 and two in intron 5) showed highly significant association with alcoholism (P=0.004-0.007). Two SNPs (both in intron 4) were significantly associated with major depressive syndrome (P=0.004 and 0.017). Haplotype analyses revealed that the most common haplotype (>40% frequency), T-T-T (rs1824024-rs2061174-rs324650), was under-transmitted to affected individuals with alcohol dependence and major depressive syndrome. Different complementary haplotypes were over-transmitted in alcohol dependent and depressed individuals. These findings provide strong evidence that variants within or close to the CHRM2 locus influence risk for two common psychiatric disorders. Copyright 2004 Oxford University Press