Neuropsychiatric disorders are highly heritable polygenic disorders arising from the complex interplay of highly penetrant rare variants and common variants of small effect. There is a large index of comorbidity and shared genetic risk between disorders, reflecting the pleiotropy of individual variants as well as predicted downstream pathway-level convergence. Importantly, the mechanism(s) through which psychiatric disease-associated variants interact to contribute to disease risk remains unknown. Human induced pluripotent stem cell (hiPSC)-based models are increasingly useful for the systematic study of the complex genetics associated with brain diseases, particularly when combined with CRISPR-mediated genomic engineering, which together facilitate isogenic comparisons of defined neuronal cell types. In this review, we discuss the latest CRISPR technologies and consider how they can be successfully applied to the functional characterization of the growing list genetic variants linked to psychiatric disease. •An introduction to the complex genetic architectures of neuropsychiatric disease.•A review of state-of-the-art CRISPR mediated perturbations.•Applications of hiPSC- and CRISPR-based methodologies to for functional validation of neuropsychiatric disease risk loci.