The Finland-United States Investigation Of NIDDM Genetics (FUSION) study aims to identify genetic variants that predispose to type 2 diabetes by studying affected sibling pair families from Finland. Chromosome 20 showed our strongest initial evidence for linkage. It currently has a maximum logarithm of odds (LOD) score of 2.48 at 70 cM in a set of 495 families. In this study, we searched for diabetes susceptibility variant(s) at 20q13 by genotyping single nucleotide polymorphism (SNP) markers in case and control DNA pools. Of 291 SNPs successfully typed in a 7.5-Mb interval, the strongest association confirmed by individual genotyping was with SNP rs2144908, located 1.3 kb downstream of the primary β-cell promoter P2 of hepatocyte nuclear factor-4α (HNF4A). This SNP showed association with diabetes disease status (odds ratio [OR] 1.33, 95% CI 1.06–1.65, P = 0.011) and with several diabetes-related traits. Most of the evidence for linkage at 20q13 could be attributed to the families carrying the risk allele. We subsequently found nine additional associated SNPs spanning a 64-kb region, including the P2 and P1 promoters and exons 1–3. Our results and the independent observation of association of SNPs near the P2 promoter with diabetes in a separate study population of Ashkenazi Jewish origin suggests that variant(s) located near or within HNF4A increases susceptibility to type 2 diabetes.