A class of alleles at the VNTR (variable number of tandem repeat) locus in the 5' region of the insulin gene (INS) on chromosome 11p is associated with increased risk of insulin-dependent diabetes mellitus (IDDM), but family studies have failed to demonstrate linkage. INS is thought to contribute to IDDM susceptibility but this view has been difficult to reconcile with the lack of linkage evidence. We thus investigated polymorphisms of INS and neighbouring loci in random diabetics, IDDM multiplex families and controls. HLA-DR4-positive diabetics showed an increased risk associated with common variants at polymorphic sites in a 19-kilobase segment spanned by the 5' INS VNTR and the third intron of the gene for insulin-like growth factor II (IGF2). As INS is the major candidate gene from this region, diabetic and control sequence were compared to identify all INS polymorphisms that could contribute to disease susceptibility. In multiplex families the IDDM-associated alleles were transmitted preferentially to HLA-DR4-positive diabetic offspring from heterozygous parents. The effect was strongest in paternal meioses, suggesting a possible role for maternal imprinting. Our results strongly support the existence of a gene or genes affecting HLA-DR4 IDDM susceptibility which is located in a 19-kilobase region of INS-IGF2. Our results also suggest new ways to map susceptibility loci in other common diseases.