We have previously reported suggestive linkage of type 2 diabetes mellitus to chromosome 10q. We genotyped 228 microsatellite markers in Icelandic individuals with type 2 diabetes and controls throughout a 10.5-Mb interval on 10q. A microsatellite, DG10S478, within intron 3 of the transcription factor 7-like 2 gene (TCF7L2; formerly TCF4) was associated with type 2 diabetes (P = 2.1 × 10−9). This was replicated in a Danish cohort (P = 4.8 × 10−3) and in a US cohort (P = 3.3 × 10−9). Compared with non-carriers, heterozygous and homozygous carriers of the at-risk alleles (38% and 7% of the population, respectively) have relative risks of 1.45 and 2.41. This corresponds to a population attributable risk of 21%. The TCF7L2 gene product is a high mobility group box-containing transcription factor previously implicated in blood glucose homeostasis. It is thought to act through regulation of proglucagon gene expression in enteroendocrine cells via the Wnt signaling pathway.