Heritable allelic variation in gene expression may contribute to sporadic and familial disease, but is relatively unexplored. Papillary thyroid cancer (PTC) is characterized by strong heritability but predisposing genes have not been detected. Here we tested the hypothesis that inherited variation in allelic expression occurs in thyroid tissue and so might contribute to disease. We studied genes with a role in thyroid function, signaling, and/or tumorigenesis (PRKAR1A, DUOX1, IP3RI, ARGBP2, TPO, TG, and PEG10). We screened thyroid tissues from controls and patients with thyroid disease and lymphoblastoid cell lines from 40 healthy individuals. We demonstrated the robustness of the technique, a fluorescent dideoxy terminator-based method distinguishing the mRNA products of alleles in individuals who are heterozygous for a polymorphism in the transcript. We confirmed that the PEG10 gene transcript was derived only from one allele because of genetic imprinting. Three other genes, DUOX1, TPO, and ARGBP2 showed allelic variation in thyroid tissue and/or lymphoblastoid cells. Benign and malignant thyroid tissue from the same patient always gave concordant results. DUOX1 variation in expression was seen in 3 of 13 patients with PTC and 6 of 27 patients with benign disease. Further studies are needed to determine the significance of these and other allelic variations.