IL-13 is a central mediator of allergic inflammation. The single nucleotide polymorphism IL13-1112C>T (rs1800925) is associated with allergic phenotypes in ethnically distinct populations, but the underlying mechanism(s) remain unknown. Using in vivo, in vitro, and in silico analysis, we show that the IL13-1112T allele enhanced IL13 promoter activity in primary human and murine CD4(+) Th2 lymphocytes. Increased expression of IL13-1112T in Th2 cells was associated with the creation of a Yin-Yang 1 binding site that overlapped a STAT motif involved in negative regulation of IL13 expression and attenuated STAT6-mediated transcriptional repression. Because IL-13 secretion was increased in IL13-1112TT homozygotes, we propose that increased expression of IL13-1112T in vivo may underlie its association with susceptibility to allergic inflammation. Interestingly, IL13-1112T had opposite transcriptional effects in nonpolarized CD4(+) T cells, paralleled by distinct patterns of DNA-protein interactions at the IL13 promoter. Our findings suggest the nuclear milieu dictates the functional outcome of genetic variation.