Association studies have suggested that Disrupted-in-Schizophrenia 1 (DISC1) confers a genetic risk at the level of endophenotypes that underlies many major mental disorders. Despite the progress in understanding the significance of DISC1 at neural development, the mechanisms underlying DISC1 regulation of synaptic functions remain elusive. Because alterations in the cortical GABA system have been strongly linked to the pathophysiology of schizophrenia, one potential target of DISC1 that is critically involved in the regulation of cognition and emotion is the GABAA receptor (GABAAR). We found that cellular knockdown of DISC1 significantly reduced GABAAR-mediated synaptic and whole-cell current, whereas overexpression of wild-type DISC1, but not the C-terminal-truncated DISC1 (a schizophrenia-related mutant), significantly increased GABAAR currents in pyramidal neurons of the prefrontal cortex. These effects were accompanied by DISC1-induced changes in surface GABAAR expression. Moreover, the regulation of GABAARs by DISC1 knockdown or overexpression depends on the microtubule motor protein kinesin 1 (KIF5). Our results suggest that DISC1 exerts an important effect on GABAergic inhibitory transmission by regulating KIF5/microtubule-based GABAAR trafficking in the cortex. The knowledge gained from this study would shed light on how DISC1 and the GABA system are linked mechanistically and how their interactions are critical for maintaining a normal mental state.