This study is, to the best of our knowledge, the first application of whole transcriptome sequencing (RNA-seq) to cells isolated from postmortem human brain by laser capture microdissection. We investigated the transcriptome of dentate gyrus (DG) granule cells in postmortem human hippocampus in 79 subjects with mental illness (schizophrenia, bipolar disorder, major depression) and nonpsychiatric controls. We show that the choice of normalization approach for analysis of RNA-seq data had a strong effect on results; under our experimental conditions a nonstandard normalization method gave superior results. We found evidence of disrupted signaling by miR-182 in mental illness. This was confirmed using a novel method of leveraging microRNA genetic variant information to indicate active targeting. In healthy subjects and those with bipolar disorder, carriers of a high- vs those with a low-expressing genotype of miR-182 had different levels of miR-182 target gene expression, indicating an active role of miR-182 in shaping the DG transcriptome for those subject groups. By contrast, comparing the transcriptome between carriers of different genotypes among subjects with major depression and schizophrenia suggested a loss of DG miR-182 signaling in these conditions.