Schizophrenia is highly heritable, yet its underlying pathophysiology remains largely unknown. Among the most well-replicated findings in neurobiological studies of schizophrenia are deficits in myelination and white matter integrity; however, direct etiological genetic and cellular evidence has thus far been lacking. Here, we implement a family-based approach for genetic discovery in schizophrenia combined with functional analysis using induced pluripotent stem cells (iPSCs). We observed familial segregation of two rare missense mutations in Chondroitin Sulfate Proteoglycan 4 (CSPG4) (c.391G > A [p.A131T], MAF 7.79 × 10-5 and c.2702T > G [p.V901G], MAF 2.51 × 10-3). The CSPG4A131T mutation was absent from the Swedish Schizophrenia Exome Sequencing Study (2536 cases, 2543 controls), while the CSPG4V901G mutation was nominally enriched in cases (11 cases vs. 3 controls, P = 0.026, OR 3.77, 95% CI 1.05-13.52). CSPG4/NG2 is a hallmark protein of oligodendrocyte progenitor cells (OPCs). iPSC-derived OPCs from CSPG4A131T mutation carriers exhibited abnormal post-translational processing (P = 0.029), subcellular localization of mutant NG2 (P = 0.007), as well as aberrant cellular morphology (P = 3.0 × 10-8), viability (P = 8.9 × 10-7), and myelination potential (P = 0.038). Moreover, transfection of healthy non-carrier sibling OPCs confirmed a pathogenic effect on cell survival of both the CSPG4A131T (P = 0.006) and CSPG4V901G (P = 3.4 × 10-4) mutations. Finally, in vivo diffusion tensor imaging of CSPG4A131T mutation carriers demonstrated a reduction of brain white matter integrity compared to unaffected sibling and matched general population controls (P = 2.2 × 10-5). Together, our findings provide a convergence of genetic and functional evidence to implicate OPC dysfunction as a candidate pathophysiological mechanism of familial schizophrenia.