State of the art diagnosis of mental illness is controversial. There are no biological markers for diagnosing any mental illness. The Membrane Potential Ratio (MPR) offers hope to be the first biological marker that could be used for both diagnosis and monitoring the treatment response. The Membrane Potential Ratio (MPR) is the ratio of the membrane potential of whole blood cells in a test buffer to that in a reference buffer. MPR is lower for bipolar disorder (BD) patients when compared to that of a group of ADHD patients. Others with and without mental illness are classified as Negatives. The MPR values for Negatives fall between BDs and ADHDs. The MPR responds readily to successful treatments. This result could be used to monitor the progress of treated patients. In addition, the medication response characteristics of the MPR serve as a self-validation for the MPR test itself. The cause of these effects observed in RBCs is explained by the diacylglycerol (DAG) pathway modulating human small conductance potassium channels (hSK). Since the hSK family is widely distributed in neurons, the differences observed in RBCs among BDs, ADHDs and Negatives are explained by this finding. Some of the clinical observations can also be explained by this pathway. Furthermore, this pathway leads to new drugs development for these illnesses. The signaling pathway leads to an understanding of the disorders from neurotransmitter signaling to the excitability of neurons.