The fatty acid-binding proteins (FABPs) are cytoplasmic proteins involved in intracellular fatty acid transport and metabolism. FABP2, the intestinal-type FABP, is expressed exclusively in enterocytes in the small intestine. In previous studies of an Ala54Thr substitution in FABP2, the Thr-allele showed association with increased lipid oxidation, elevated plasma lipids, and impaired insulin sensitivity. We screened roughly 1 kb 5' of the FABP2 initiation codon and identified three insertion/deletion polymorphisms and four single nucleotide polymorphisms (SNPs). Three of the SNPs were in complete linkage disequilibrium with the three insertion/deletion polymorphisms, defining exactly two haplotypes (FABP2p-ID). We tested the hypothesis that this variation alters gene expression by transfecting Caco-2 cells with pGL3-Basic constructs containing opposite FABP2p-ID haplotypes. Luciferase assays showed a statistically significant two-fold increase in gene expression of the pGL3-insertion construct over the pGL3-deletion construct (P<0.001; n=5). We also tested for association between three FABP2 variants and measurements of body composition, plasma lipids, and insulin sensitivity in non-diabetic control subjects from the San Luis Valley Diabetes Study (n=714). The only informative variant, FABP2p-ID, was statistically significantly associated with body mass index (P=0.042) and marginally associated with fat mass (P=0.084), cholesterol (P=0.066), and HOMA IR (a derived measure of insulin resistance; P=0.062) in the entire cohort. Similar associations were seen only in non-Hispanics when the analysis was stratified by ethnicity. Within the non-Hispanic subgroup, the effects of FABP2p-ID on plasma lipids were sex-specific. These results suggest that genetic variation in the 5' region of FABP2 affects transcriptional activity, presumably leading to alterations in body composition and lipid processing.