Tumor necrosis factor (TNF) and lymphotoxin alpha (LT-alpha) are immunomodulators that have been hypothesized to contribute to susceptibility to type 1 diabetes (T1D). Several polymorphisms in the TNF and LT-alpha loci have been extensively studied for T1D association, with conflicting reports. In this study, we examined two TNF variants and one LT-alpha variant for T1D association in 283 Caucasian, multiplex T1D families for which complete human leukocyte antigen (HLA) genotyping data are available. Initially, association with T1D was seen for LT-alpha A1069G (intron A, p=0.011, rs909253) and TNF G(-308)A (p<1x10(-5), rs1800629), but no association was observed for TNF G(-238)A (rs361525). After adjusting the data for linkage disequilibrium (LD) with DRB1-DQB1 haplotypes, however, only one polymorphism, TNF G(-238)A showed significant association with T1D (p<0.006). When HLA-DR3 haplotypes were examined, the A allele of TNF G(-238)A was significantly overtransmitted to affected offspring (p<0.009). Including HLA-B data in the analysis revealed that TNF (-238)A is present exclusively on DR3 haplotypes that also carry HLA-B18. Transmission proportion of B18-DR3 haplotypes did not differ between those with TNF (-238)A and those with TNF (-238)G. Thus, variation at TNF does not affect the T1D risk for B18-DR3 haplotypes, and the apparent association of TNF(-238)A with T1D may simply reflect its presence on a high-risk haplotype.