Neuropsychiatric genome-wide association (GWAS) studies, including for autism spectrum disorder (ASD) and schizophrenia (SCZ), show strong enrichment for regulatory elements in the developing brain. However, prioritizing risk genes and mechanisms is challenging without a unified regulatory atlas. Here, I have characterized the functional genetic regulation in the developing human brain across gene, isoform, and local splicing features by systematically harmonizing 672 diverse samples. I identified 15,752 genes harboring gene/isoform-expression and/or splicing quantitative trait loci (xQTLs), mapping 3,739 to cellular contexts. I discovered that gene expression heritability drops during development, especially within the developmental window of 10 to 18 weeks post-conception. Through cell type deconvolution and heritability analysis in homogenously cultured progenitor and neuronal cells, I demonstrated that the drop of heritability likely reflects both the increasing cellular heterogeneity and the intrinsic properties of neuronal maturation. I also discovered that isoform-level regulation, particularly in the second trimester, mediated the largest proportion of neuropsychiatric GWAS heritability. Via colocalization, I robustly prioritized mechanisms for ~60% of GWAS loci across 5 neuropsychiatric disorders, exceeding adult brain findings. Finally, the genetic regulation in the developing human brain was contextualized within gene/isoform co-expression networks, revealing the comprehensive landscape of genetic regulation in development and disease.