The minisatellite DNA polymorphism consisting of a variable number of tandem repeats (VNTR) at the human INS (insulin gene) 5'-flanking region has demonstrated allelic effects on insulin gene transcription in vitro and has been associated with the level of insulin gene expression in vivo. We now show that this VNTR also has effects on the nearby insulin-like growth factor II gene (IGF2) in human placenta in vivo and in the HepG2 hepatoma cell line in vitro. We show that higher steady-state IGF2 mRNA levels are associated with shorter alleles (class I) than the longer class III alleles in term placentae. In vitro, reporter gene activity was greater from reporter gene constructs with IGF2 promoter 3 in the presence of class I alleles than from those with class III. Taken together with the documented transcriptional effects on the insulin gene, we propose that the VNTR may act as a long range control element affecting the expression of both INS and IGF2. The localization of a type 1 diabetes susceptibility locus (IDDM2) to the VNTR itself suggests that either or both of these genes may be involved in the biologic effects of IDDM2.