Variation in gene expression is a fundamental aspect of human phenotypic variation. Several recent studies have analyzed gene expression levels in populations of different continental ancestry and reported population differences at a large number of genes. However, these differences could largely be due to non-genetic (e.g., environmental) effects. Here, we analyze gene expression levels in African American cell lines, which differ from previously analyzed cell lines in that individuals from this population inherit variable proportions of two continental ancestries. We first relate gene expression levels in individual African Americans to their genome-wide proportion of European ancestry. The results provide strong evidence of a genetic contribution to expression differences between European and African populations, validating previous findings. Second, we infer local ancestry (0, 1, or 2 European chromosomes) at each location in the genome and investigate the effects of ancestry proximal to the expressed gene (cis) versus ancestry elsewhere in the genome (trans). Both effects are highly significant, and we estimate that 12+/-3% of all heritable variation in human gene expression is due to cis variants.