The brain serotonergic system has an essential role in the physiological functions of the central nervous system and dysregulation of serotonin (5-HT) homeostasis has been implicated in many neuropsychiatric disorders. The tryptophan hydroxylase-2 (TPH2) gene is the rate-limiting enzyme in brain 5-HT synthesis, and thus is an ideal candidate gene for understanding the role of dysregulation of brain serotonergic homeostasis. Here, we characterized a common, but functional single-nucleotide polymorphism (SNP rs1386493) in the TPH2 gene, which decreases efficiency of normal RNA splicing, resulting in a truncated TPH2 protein (TPH2-TR) by alternative splicing. TPH2-TR, which lacks TPH2 enzyme activity, dominant-negatively affects full-length TPH2 function, causing reduced 5-HT production. The predicted mRNA for TPH2-TR is present in postmortem brain of rs1386493 carriers. The rs13864923 variant does not appear to be overrepresented in either global or multiplex depression cohorts. However, in combination with other gene variants linked to 5-HT homeostasis, this variant may exhibit important epistatic influences.