Variants in hepatocyte nuclear factor-4 alpha (HNF4 alpha), a transcription factor that influences the expression of glucose metabolic genes, have been correlated with maturity-onset diabetes of the young, a monogenic form of diabetes. Previously, in a genome scan of Ashkenazi Jewish type 2 diabetic families, we observed linkage to the chromosome 20q region encompassing HNF4 alpha. Here, haplotype-tag single nucleotide polymorphisms (htSNPs) were identified across a 78-kb region around HNF4 alpha and evaluated in an association analysis of Ashkenazi Jewish type 2 diabetic (n = 275) and control (n = 342) subjects. We found that two of nine htSNPs were associated with type 2 diabetes: a 3' intronic SNP, rs3818247 (29.2% case subjects vs. 21.7% control subjects; P = 0.0028, odds ratio [OR] 1.49) and a 5' htSNP located approximately 3.9 kb upstream of P2, rs1884614 (26.9% case subjects vs. 20.3% control subjects; P = 0.0078, OR 1.45). Testing of additional SNPs 5' of rs1884614 revealed a >10-kb haplotype block that was associated with type 2 diabetes. Conditioning on the probands' rs1884614 genotype suggested that the chromosomal region identified by the htSNP accounted for the linkage signal on chromosome 20q in families in which the proband carried at least one risk allele. Notably, the associations and the partitioned linkage profiles near P2 were independently observed in a Finnish sample, suggesting the presence of potential regulatory element(s) that may contribute to the risk for type 2 diabetes.