The PTPN22 (protein tyrosine phosphatase N22) gene encodes the protein tyrosine phosphatase Lyp. One function of Lyp is downregulation of T-cell signaling through its interaction with the negative regulatory kinase C-terminal Src tyrosine kinase (Csk). A single nucleotide polymorphism in the PTPN22 gene, C1858T, encodes products with different Csk binding affinities. Disease association of the PTPN22 1858T allele has been reported in case-control studies of three different autoimmune disorders: type 1 diabetes (T1D), rheumatoid arthritis, and systemic lupus erythematosus. In this study, a set of 341 white, multiplex T1D families were genotyped for the C1858T single nucleotide polymorphism of PTPN22, and transmission disequilibrium test analysis revealed significant association (p = 0.005) of the T allele with T1D. No effects of parent of origin, sex of patient, or human leukocyte antigen genotype (high-risk human leukocyte antigen DR3/DR4 vs non-DR3/DR4) were observed. However, transmission of the T allele was significantly increased in the subset of patients who also carried at least one copy of the TCF7 883A allele, another allele that is important in regulating T-cell responses and that is associated with T1D. These results are consistent with the hypothesis that individuals lacking the C allele of PTPN22 may have reduced capacity to downregulate T-cell responses and may therefore be more susceptible to autoimmunity.