Cholinergic muscarinic 2 receptor (CHRM2) is implicated in memory and cognition, functions impaired in many neuropsychiatric disorders. Wang et al. [Wang, J.C., Hinrichs, A.L., Stock, H., Budde, J., Allen, R., Bertelsen, S., Kwon, J.M., Wu, W., Dick, D.M., Rice, J. et al. (2004) Evidence of common and specific genetic effects: association of the muscarinic acetylcholine receptor M2 (CHRM2) gene with alcohol dependence and major depressive syndrome. Hum. Mol. Genet., 13, 1903-1911] reported that variation in CHRM2 gene predisposed to alcohol dependence (AD) and major depressive syndrome. We examined the relationships between variation in CHRM2 and AD, drug dependence (DD) and affective disorders, using a novel extended case-control structured association (SA) method. Six markers at CHRM2 and 38 ancestry-informative markers (AIMs) were genotyped in a sample of 871 subjects, including 333 healthy controls [287 European-Americans (EAs) and 46 African-Americans (AAs)] and 538 AD and/or DD subjects (415 with AD and 346 with DD and 382 EAs and 156 AAs). The same CHRM2 markers were genotyped in a sample of 137 EA subjects with affective disorders. All of the six markers were in Hardy-Weinberg equilibrium in controls, but SNP3 (rs1824024) was in Hardy-Weinberg disequilibrium in the AD and DD groups. Using conventional case-control comparisons, some markers were nominally significantly or suggestively associated with phenotypes before or after controlling for population stratification and admixture effects, but these associations were not significant after multiple test correction. However, regression analysis identified specific alleles, genotypes, haplotypes and diplotypes that were significantly associated with risk for each disorder. We conclude that variation in CHRM2 predisposes to AD, DD and affective disorders. One haplotype block within the 5'-UTR of CHRM2 may be more important for the development of these disorders than other regions. Interaction between two specific alleles within this block and interaction between two specific diplotypes covering this block multiplicatively increased risk for AD and DD. Although interaction between these two diplotypes also increased risk for affective disorders, the magnitude of the increased risk was less than the sum of the individual risks. In addition, a specific diplotype might inversely affect risk for AD and DD and risk for affective disorders.