ABSTRACT Genome-wide association studies (GWASs) have identified thousands of risk loci for many psychiatric and substance use phenotypes, however the biological consequences of these loci remain largely unknown. We performed a transcriptome-wide association study of 10 psychiatric disorders and 6 substance use phenotypes (collectively termed “mental health phenotypes”) using expression quantitative trait loci data from 532 prefrontal cortex samples. We estimated the correlation due to predicted genetically regulated expression between pairs of mental health phenotypes, and compared the results with the genetic correlations. We identified 1,645 genes with at least one significant trait association, comprising 2,176 significant associations across the 16 mental health phenotypes of which 572 (26%) are novel. Overall, the transcriptomic correlations for phenotype pairs were significantly higher than the respective genetic correlations. For example, attention deficit hyperactivity disorder and autism spectrum disorder, both childhood developmental disorders, showed a much higher transcriptomic correlation (r=0.84) than genetic correlation (r=0.35). Finally, we tested the enrichment of phenotype-associated genes in gene co-expression networks built from prefrontal cortex. Phenotype-associated genes were enriched in multiple gene co-expression modules and the implicated modules contained genes involved in mRNA splicing and glutamatergic receptors, among others. Together, our results highlight the utility of gene expression data in the understanding of functional gene mechanisms underlying psychiatric disorders and substance use phenotypes.