Recent data suggest that common variation in the transcription factor 7-like 2 (TCF7L2) gene is associated with type 2 diabetes. Evaluation of such associations in independent samples provides necessary replication and a robust assessment of effect size. Using four TCF7L2 single nucleotide polymorphisms (SNPs; including the two most associated in the previous study), we conducted a case-control study in 2,158 type 2 diabetic subjects and 2,574 control subjects and a family-based association analysis in 388 parent-offspring trios all from the U.K. All SNPs showed powerful associations with diabetes in the case-control analysis, with strongest effects at rs7903146 (allele-wise relative risk 1.36 [95% CI 1.24–1.48], P = 1.3 × 10⁻¹¹). Data were consistent with a multiplicative model. The family-based analyses provided independent evidence for association at all loci (e.g., rs4506565, 62% transmission, P = 7 × 10⁻⁵) with no parent-of-origin effects. The frequency of diabetes-associated TCF7L2 genotypes was greater in cases ascertained for positive family history and early onset (rs4606565, P = 0.02); the population-attributable risk, estimated from the least-selected cases, is ∼16%. The overall evidence for association for these variants (P = 4.4 × 10⁻¹⁴ combining case-control and family-based analyses for rs4506565) exceeds genome-wide significance criteria and clearly establishes TCF7L2 as a type 2 diabetes susceptibility gene of substantial importance.