Linkage analyses of bipolar families have confirmed that there is a susceptibility locus near the telomere on chromosome 21q. To fine map this locus we carried out tests of allelic association using 30 genetic markers near the telomere at 21q22.3 in 600 bipolar research subjects and 450 ancestrally matched supernormal control subjects. We found significant allelic association with the microsatellite markers D21S171 (P=0.016) and two closely linked single-nucleotide polymorphisms, rs1556314 (P=0.008) and rs1785467 (P=0.025). A test of association with a three locus haplotype across the susceptibility region was significant with a permutation test of P=0.011. A two SNP haplotype was also significantly associated with bipolar disorder (P=0.01). Only two brain expressed genes, TRPM2 and C21ORF29 (TSPEAR), are present in the associated region. TRPM2 encodes a calcium channel receptor and TSPEAR encodes a peptide with repeats associated with epilepsy in the mouse. DNA from subjects who had inherited the associated marker alleles was sequenced. A base pair change (rs1556314) in exon 11 of TRPM2, which caused a change from an aspartic acid to a glutamic acid at peptide position 543 was found. This SNP showed the strongest association with bipolar disorder (P=0.008). Deletion of exon 11 of TRPM2 is known to cause dysregulation of cellular calcium homeostasis in response to oxidative stress. A second nonconservative change from arginine to cysteine at position 755 in TRPM2 (ss48297761) was also detected. A third nonconservative change from histidine to glutamic acid was found in exon 8 of TSPEAR. These changes need further investigation to establish any aetiological role in bipolar disorder.