Converging evidence increasingly suggests that psychiatric disorders, such as major depressive disorder (MDD) and autism spectrum disorder (ASD), are not unitary diseases, but rather heterogeneous syndromes that involve diverse, co-occurring symptoms and divergent responses to treatment. This clinical heterogeneity has hindered the progress of precision diagnosis and treatment effectiveness in psychiatric disorders. In this study, we propose BPI-GNN, a new interpretable graph neural network (GNN) framework for analyzing functional magnetic resonance images (fMRI), by leveraging the famed prototype learning. In addition, we introduce a novel generation process of prototype subgraph to discover essential edges of distinct prototypes and employ total correlation (TC) to ensure the independence of distinct prototype subgraph patterns. BPI-GNN can effectively discriminate psychiatric patients and healthy controls (HC), and identify biological meaningful subtypes of psychiatric disorders. We evaluate the performance of BPI-GNN against 11 popular brain network classification methods on three psychiatric datasets and observe that our BPI-GNN always achieves the highest diagnosis accuracy. More importantly, we examine differences in clinical symptom profiles and gene expression profiles among identified subtypes and observe that our identified brain-based subtypes have the clinical relevance. It also discovers the subtype biomarkers that align with current neuro-scientific knowledge.