The invention relates to the identification and selection of novel biomarkers and the identification and selection of novel biomarker combinations which are differentially expressed in blood and useful in diagnosing schizophrenia and/or bipolar disorder as well as monitoring therapeutic efficacy of treatment for schizophrenia or bipolar disorder. The measurement of expression levels of the products of the biomarkers and combinations of biomarkers of the invention can be used to diagnose schizophrenia and/or bipolar disorder. Measurement of the expression level of products of biomarkers of the invention using polynucleotides and proteins which specifically and/or selectively hybridize to the products of the biomarkers of the invention are also encompassed within the scope of the invention as are compositions and kits containing said polynucleotides and proteins. Further encompassed by the invention is the use of the polynucleotides and proteins to monitor the efficacy of therapeutic regimens. The invention also provides for the identification of methods of using the products of the biomarkers of the invention in the identification of novel therapeutic targets of schizophrenia and/or bipolar disorder and a method of screening the genes of said biomarkers for additional markers of disease.