Tissue-specific transcriptional regulation is central to human disease(1). To identify regulatory DNA active in human pancreatic islets, we profiled chromatin by formaldehyde-assisted isolation of regulatory elements(2-4) coupled with high-throughput sequencing (FAIRE-seq). We identified similar to 80,000 open chromatin sites. Comparison of FAIRE-seq data from islets to that from five non-islet cell lines revealed similar to 3,300 physically linked clusters of islet-selective open chromatin sites, which typically encompassed single genes that have islet-specific expression. We mapped sequence variants to open chromatin sites and found that rs7903146, a TCF7L2 intronic variant strongly associated with type 2 diabetes(5), is located in islet-selective open chromatin. We found that human islet samples heterozygous for rs7903146 showed allelic imbalance in islet FAIRE signals and that the variant alters enhancer activity, indicating that genetic variation at this locus acts in cis with local chromatin and regulatory changes. These findings illuminate the tissue-specific organization of cis-regulatory elements and show that FAIRE-seq can guide the identification of regulatory variants underlying disease susceptibility.