A recent Genome-Wide Association Study showed that the rs2514218 single nucleotide polymorphism (SNP) in close proximity to dopamine receptor D2 is strongly associated with schizophrenia. Further, an in silico experiment showed that rs2514218 has a cis expression quantitative trait locus effect in the basal ganglia. To date, however, the functional consequence of this SNP is unknown. Here, we used functional Magnetic resonance imaging to investigate the impact of this risk allele on striatal activation during proactive and reactive response inhibition in 45 unaffected siblings of schizophrenia patients. We included siblings to circumvent the illness specific confounds affecting striatal functioning independent from gene effects. Behavioral analyses revealed no differences between the carriers (n = 21) and noncarriers (n = 24). Risk allele carriers showed a diminished striatal response to increasing proactive inhibitory control demands, whereas overall level of striatal activation in carriers was elevated compared to noncarriers. Finally, risk allele carriers showed a blunted striatal response during successful reactive inhibition compared to the noncarriers. These data are consistent with earlier reports showing similar deficits in schizophrenia patients, and point to a failure to flexibly engage the striatum in response to contextual cues. This is the first study to demonstrate an association between impaired striatal functioning and the rs2514218 polymorphism. We take our findings to indicate that striatal functioning is impaired in carriers of the DRD2 risk allele, likely due to dopamine dysregulation at the DRD2 location.