The recent whole-genome scan for breast cancer has revealed the FGFR2 (fibroblast growth factor receptor 2) gene as a locus associated with a small, but highly significant, increase in the risk of developing breast cancer. Using fine-scale genetic mapping of the region, it has been possible to narrow the causative locus to a haplotype of eight strongly linked single nucleotide polymorphisms (SNPs) spanning a region of 7.5 kilobases (kb) in the second intron of the FGFR2 gene. Here we describe a functional analysis to define the causative SNP, and we propose a model for a disease mechanism. Using gene expression microarray data, we observed a trend of increased FGFR2 expression in the rare homozygotes. This trend was confirmed using real-time (RT) PCR, with the difference between the rare and the common homozygotes yielding a Wilcox p-value of 0.028. To elucidate which SNPs might be responsible for this difference, we examined protein-DNA interactions for the eight most strongly disease-associated SNPs in different breast cell lines. We identify two cis-regulatory SNPs that alter binding affinity for transcription factors Oct-1/Runx2 and C/EBPbeta, and we demonstrate that both sites are occupied in vivo. In transient transfection experiments, the two SNPs can synergize giving rise to increased FGFR2 expression. We propose a model in which the Oct-1/Runx2 and C/EBPbeta binding sites in the disease-associated allele are able to lead to an increase in FGFR2 gene expression, thereby increasing the propensity for tumour formation.