Significant evidence of linkage to type 2 diabetes (T2D) has been shown in a relatively broad region on chromosome 20q, where the hepatocyte nuclear factor-4alpha (HNF4A) has been noted as a positional candidate. To systematically evaluate genetic susceptibility to T2D in the relevant region, we examined the disease association by using 1145 SNPs in two-step screening in the Japanese population. The marker screening enabled us to identify significant disease association in the lipopolysaccharide binding protein (LBP) but not in the HNF4A locus. In a 17.7-Mb interval screened, the strongest association was identified for a SNP, rs2232592, located in the intron of LBP, with an estimated odds ratio of 1.73 (95% CI 1.30-2.31) (P=0.0002) in the whole study panel involving 675 case and 474 control subjects. Our data suggest that the LBP gene may confer genetic susceptibility to T2D and this warrants further replication study.