Two extended haplotypes exist across the tau gene-H1 and H2-with H1 consistently associated with increased risk of progressive supranuclear palsy (PSP). Using 15 haplotype tagging SNPs (htSNPs), capturing >95% of MAPT haplotype diversity, we performed association analysis in a US sample of 274 predominantly pathologically confirmed PSP patients and 424 matched control individuals. We found that PSP risk is associated with one of two major ancestral H1 haplotypes, H1B, increasing from 14% in control individuals to 22% in PSP patients (P<0.001). In young PSP patients, the H1B risk could be localized to a 22 kb regulatory region in intron 0 (P<0.001) and could be fully explained by one SNP, htSNP167, creating a LBP-1c/LSF/CP2 site, shown to regulate the expression of genes in other neurodegenerative disorders. Luciferase reporter data indicated that the 182 bp conserved regulatory region, in which htSNP167 is located, is transcriptionally active with both alleles differentially influencing expression. Further, we replicated the htSNP167 association in a second, independently ascertained US PSP patient-control sample. However, the htSNP association showed that H1 risk alone could not explain the overall differences in H1 and H2 frequencies in PSP patients and control individuals. Thus, risk variants on different H1 htSNP haplotypes and protective variants on H2 contribute to population risk for PSP.