Variation at the variable number tandem repeat (VNTR) minisatellite 5' of the insulin gene (INS) is associated with several phenotypes, including type 1 diabetes, polycystic ovary syndrome, and birth weight. Case-control studies have suggested that class III VNTR alleles are also associated with type 2 diabetes, but results have been inconsistent and may reflect population stratification. To explore further the role of the INS-VNTR in type 2 diabetes susceptibility, we used family-based association methods in 155 parent-offspring trios from the British Diabetic Association-Warren Trios repository, each ascertained via a Europid proband with type 2 diabetes. Overall, there was no significant association between diabetes and the INS-VNTR genotype, with 65 of 119 heterozygous parents (55%) transmitting class III and 54 class I (P = 0.16, one-sided). However, whereas maternal transmissions followed Mendelian expectation, there was a marked excess of class III transmission from the 49 heterozygous fathers (34 [69%] vs. 15, P = 0.003 vs. 50% expectation, P = 0.003 vs. maternal transmission). These results confirm that variation within the TH-INS-IGF2 locus, most plausibly at the VNTR itself, influences type 2 diabetes susceptibility. By demonstrating that this effect is mediated exclusively by the paternally derived allele, these findings implicate imprinted genes in the pathogenesis of type 2 diabetes.