CHRM2 SNPs in intron 4 and 5 show significant association with alcoholism (P=0.004–0.007). Two intron 4 SNPs associate with major depressive syndrome (P=0.004 and 0.017). Common haplotype T–T–T (rs1824024–rs2061174–rs324650) under-transmitted to alcohol dependent individuals. T–T–T haplotype under-transmitted to depressed individuals. Complementary haplotypes over-transmitted to alcoholics. Complementary haplotypes over-transmitted to depressed. CHRM2 previously linked to event-related oscillations. Families recruited via alcohol dependent probands. UNPHASED PDTPHASE test used for analysis. 11 SNPs spanning CHRM2 examined. Variants within or near CHRM2 influence risk for both disorders. CHRM2 encodes muscarinic acetylcholine receptor M2. Gene has single coding exon and alternatively spliced 5′ UTR. Alcoholism, depression, and EROs show correlated linkage on chromosome 7q. Findings provide strong evidence for CHRM2 role in psychiatric risk.