Tumor necrosis factor (TNF) is a powerful pro-inflammatory cytokine and immuno-regulatory molecule, and modulates susceptibility to musculoskeletal diseases. Several meta-analyses and replicated association studies have implicated the minor 'A' variant within the TNF promoter single nucleotide polymorphism (SNP) rs361525 (-238A/G) as a risk allele in joint related disorders, including psoriatic and juvenile idiopathic arthritis, and osteolysis after joint arthroplasty. Here we characterized the effect of this variant on TNF promoter function. A transcriptional reporter, encoding the -238A variant of the TNF promoter, resulted in 2.2 to 2.8 times greater transcriptional activation versus the 'G' variant in murine macrophages when stimulated with pro-inflammatory stimuli. Bioinformatic analysis predicted a putative binding site for thyroid hormone receptor (TR) for the -238A but not the -238G allele. Overexpression of TR-α induced promoter expression 1.8-fold in the presence of the 'A' allele only. TR-α expression both potentiated and sensitized the -238A response to LPS or a titanium particulate stimulus, whilst siRNA knockdown of either THRA or THRB impaired transcriptional activation for the -238A variant only. This effect was independent of receptor-ligand binding of triiodothyronine. Immunohistochemical analysis of osteolysis interface membranes from patients undergoing revision surgery confirmed expression of TR-α within osteoclast nuclei at the resorption surface. The 'A' allele at rs361525 confers increased transcriptional activation of the TNF promoter and influences susceptibility to several arthritic conditions. This effect is modulated, at least in part, by binding of TR, which both sensitizes and potentiates transcriptional activation of the 'A' variant independent of its endogenous ligand.