A novel susceptibility locus (rs11098403) for schizophrenia and bipolar disorder (BD) was identified in an Ashkenazi Jewish population by a recent large-scale genome-wide association study. The rs11098403 is located in the vicinity of the gene encoding N-deacetylase/N-sulfotransferase (heparan glucosaminyl) 3, (NDST3). This study aimed to replicate the results in a Han Chinese population and then potentially extend these findings. We performed a two-stage study to investigate the association of NDST3 with the schizophrenia and BD risk in the Han Chinese. In stage 1, a total of 632 patients with schizophrenia, 654 patients with BD and 684 healthy controls were recruited from the Shanghai region. In stage 2, 522 schizophrenia patients and 547 normal subjects were enrolled from the Hangzhou region. Then, we conducted a meta-analysis based on the present literature. In stage 1, the single nucleotide polymorphism (SNP) rs11098403 showed a significant association with schizophrenia (corrected P=0.005). The frequency of the rs11098403 G allele was significantly lower among schizophrenia patients than among the controls (odds ratio (OR)=0.68, 95% confidence interval (CI): 0.55-0.84, corrected P=0.002). No significant difference was observed in individual SNP marker genotypes or allele distributions between the BD and control groups. In stage 2, the association of rs11098403 with schizophrenia could be validated (genotypic P=0.001 and allelic P=0.0003). After pooling all data from 1861 patients with schizophrenia and 2081 controls, we observed a significant association of the rs11098403 G allele with schizophrenia (Z=5.56, P<0.001), with an OR=0.70 (95% CI: 0.61-0.79). Then, we performed an expression quantitative trait loci analysis to investigate the functional effect of rs11098403 on NDST3 expression in the brain. We observed a significant association of rs11098403 with NDST3 expression in the hippocampus (P=0.027), although the significance did not survive after multiple testing correction. Our findings provided preliminary evidence that rs11098403 might modify the genetic risk of schizophrenia in the Han Chinese. Further investigations are warranted to identify the precise mechanism regulating brain NDST3 expression in the Han Chinese. These results would help to explain the pathophysiological mechanism of schizophrenia.