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Background: miR-137 is a microRNA involved in brain development, regulating neurogenesis and neuronal maturation. Genome-wide association studies have implicated miR-137 in schizophrenia risk but do not explain its involvement in brain function and underlying biology. Polygenic risk for schizophrenia mediated by miR-137 targets is associated with working memory, although other evidence points to emotion processing. We characterized the functional brain correlates of miR-137 target genes associated with schizophrenia while disentangling previously reported associations of miR-137 targets with working memory and emotion processing., Methods: Using RNA sequencing data from postmortem prefrontal cortex (N = 522), we identified a coexpression gene set enriched for miR-137 targets and schizophrenia risk genes. We validated the relationship of this set to miR-137 in vitro by manipulating miR-137 expression in neuroblastoma cells. We translated this gene set into polygenic scores of coexpression prediction and associated them with functional magnetic resonance imaging activation in healthy volunteers (n 1  = 214; n 2  = 136; n 3  = 2075; n 4  = 1800) and with short-term treatment response in patients with schizophrenia (N = 427)., Results: In 4652 human participants, we found that 1) schizophrenia risk genes were coexpressed in a biologically validated set enriched for miR-137 targets; 2) increased expression of miR-137 target risk genes was mediated by low prefrontal miR-137 expression; 3) alleles that predict greater gene set coexpression were associated with greater prefrontal activation during emotion processing in 3 independent healthy cohorts (n 1 , n 2 , n 3 ) in interaction with age (n 4 ); and 4) these alleles predicted less improvement in negative symptoms following antipsychotic treatment in patients with schizophrenia., Conclusions: The functional translation of miR-137 target gene expression linked with schizophrenia involves the neural substrates of emotion processing., (Copyright © 2023 Society of Biological Psychiatry. All rights reserved.)