RSRC1, whose polymorphism is associated with altered brain function in schizophrenia, is a member of the serine and arginine rich-related protein family. Through homozygosity mapping and whole exome sequencing we show that RSRC1 mutation causes an autosomal recessive syndrome of intellectual disability, aberrant behaviour, hypotonia and mild facial dysmorphism with normal brain MRI. Further, we show that RSRC1 is ubiquitously expressed, and that the RSRC1 mutation triggers nonsense-mediated mRNA decay of the RSRC1 transcript in patients' fibroblasts. Short hairpin RNA (shRNA)-mediated lentiviral silencing and overexpression of RSRC1 in SH-SY5Y cells demonstrated that RSRC1 has a role in alternative splicing and transcription regulation. Transcriptome profiling of RSRC1-silenced cells unravelled specific differentially expressed genes previously associated with intellectual disability, hypotonia and schizophrenia, relevant to the disease phenotype. Protein-protein interaction network modelling suggested possible intermediate interactions by which RSRC1 affects gene-specific differential expression. Patient-derived induced pluripotent stem cells, differentiated into neural progenitor cells, showed expression dynamics similar to the RSRC1-silenced SH-SY5Y model. Notably, patient neural progenitor cells had 9.6-fold downregulated expression of IGFBP3, whose brain expression is affected by MECP2, aberrant in Rett syndrome. Interestingly, Igfbp3-null mice have behavioural impairment, abnormal synaptic function and monoaminergic neurotransmission, likely correlating with the disease phenotype.