Systemic lupus erythematosus (SLE, MIM152700) is an autoimmune disease characterized by self-reactive antibodies resulting in systemic inflammation and organ failure. TNFAIP3, encoding the ubiquitin-modifying enzyme A20, is an established susceptibility locus for SLE. By fine mapping and genomic re-sequencing in ethnically diverse populations, we fully characterized the TNFAIP3 risk haplotype and identified a TT> A polymorphic dinucleotide (deletion T followed by a T to A transversion) associated with SLE in subjects of European (P= 1.58× 10− 8, odds ratio= 1.70) and Korean (P= 8.33× 10− 10, odds ratio= 2.54) ancestry. This variant, located in a region of high conservation and regulatory potential, bound a nuclear protein complex composed of NF-κB subunits with reduced avidity. Further, compared with the non-risk haplotype, the haplotype carrying this variant resulted in reduced TNFAIP3 mRNA and A20 protein expression. These results establish this TT> A variant as the most likely functional polymorphism responsible for the association between TNFAIP3 and SLE.