The mechanism for the association of type 1 diabetes (T1D) with IL2RA remains to be clarified. Neither of the two distinct, transmission-disequilibrium confirmed loci mapping to this gene can be explained by a coding variant. An effect on the levels of the soluble protein product sIL-2RA has been reported but its cause and relationship to disease risk is not clear. To look for an allelic effect on IL2RA transcription in cis, we examined RNA from 48 heterozygous lymphocyte samples for differential allele expression. Of the 48 samples, 32 showed statistically significant allelic imbalance. No known single nucleotide polymorphism (SNP) had perfect correlation with this transcriptional effect but the one that showed the most significant (p = 1.6 x 10(-5)) linkage disequilibrium with it was the SNP rs3118470. We had previously shown rs3118470 to confer T1D susceptibility in a Canadian dataset, independently of rs41295061 as the major reported locus (p = 5 x 10(-3), after accounting for rs41295061 by conditional regression). Lower IL2RA levels consistently originated from the T1D predisposing allele. We conclude that an as yet unidentified variant or haplotype, best marked by rs3118470, is responsible for this independent effect and increases T1D risk through diminished expression of the IL-2R, likely by interfering with the proper development of regulatory T cells.