BAT1 (D6S81E, UAP56) lies in the central MHC between TNF and HLA-B, a region containing genes that affect susceptibility to immunopathologic disorders. BAT1 protein may be directly responsible for the genetic association, as antisense studies show it can down-regulate inflammatory cytokines. Here we investigate polymorphisms at positions -22 and -348 relative to the BAT1 transcription start site. DNA samples from healthy donors were used to confirm haplotypic associations with the type 1 diabetes-susceptible 8.1 ancestral haplotype (AH; HLA-A1,B8,BAT1-22*C,BAT1-348*C,DR3 ) and the diabetes-resistant 7.1 AH (HLA-A3,B7,BAT1-22*G,BAT1-348*T,DR15). Alleles carried at BAT1-22 and -348 were in linkage disequilibrium. Electrophoretic mobility shift assays using nuclear proteins from T-cells (Jurkat and HT2), monocytes (THP1, U937) and epithelial cells (HeLa and MDA468) demonstrated DNA : protein complexes binding oligonucleotides spanning positions -22 and -348 on the 7.1 AH only. Competition assays, supershifts and molecular weight determinations suggest the complexes include the transcription factors YY1 (at -348) and Oct1 (at -22). Promoter activity was demonstrated using 520 bp and 336 bp fragments cloned from immediately upstream of the transcription start site and carrying all combinations of -22 and -348 alleles, suggesting an unidentified non-polymorphic sequence within 336 bp of the start site drives transcription. The 520 bp fragment of the BAT1 promoter cloned from the 8.1 AH was slightly less efficient than the equivalent from the 7.1 AH, whilst the reverse was observed with 336 bp fragments. This suggests BAT1 transcription on the 7.1 AH is modified by interactions involving DNA flanking positions -22 and -348.