Smith-Magenis syndrome (SMS) is a mental retardation/multiple congenital anomalies disorder associated with a heterozygous ~4-Mb deletion in 17p11.2. Patients with SMS show variability in clinical phenotype despite a common deletion found in >75–80% of patients. Recently, point mutations in the retinoic acid induced 1 (RAI1) gene, which lies within the SMS critical interval, were identified in three patients with many SMS features in whom no deletion was detected. It is not clear if the entire SMS phenotype can be accounted for by RAI1 haploinsufficiency, nor has the precise function of RAI1 been delineated. We report two novel RAI1 mutations, one frameshift and one nonsense allele, in nondeletion SMS patients. Comparisons of the clinical features in these two patients, three of the previously reported RAI1 point mutation cases, and the patients with a common deletion suggest that the majority of the clinical features in SMS result from RAI1 mutation, although phenotypic variability exists even among the individuals with RAI1 point mutations. Bioinformatics analyses of RAI1 and comparative genomics between human and mouse orthologues revealed a zinc finger-like plant homeo domain (PHD) at the carboxyl terminus that is conserved in the trithorax group of chromatin-based transcription regulators. These findings suggest RAI1 is involved in transcriptional control through a multi-protein complex whose function may be altered in individuals with SMS.