Many of the type 2 diabetes loci identified through genome-wide association studies localize to non-protein-coding intronic and intergenic regions and likely contain variants that regulate gene transcription. The CDC123/CAMK1D type 2 diabetes association signal on chromosome 10 spans an intergenic region between CDC123 and CAMK1D and also overlaps the CDC123 3'UTR. To gain insight into the molecular mechanisms underlying the association signal, we used open chromatin, histone modifications and transcription factor ChIP-seq data sets from type 2 diabetes-relevant cell types to identify SNPs overlapping predicted regulatory regions. Two regions containing type 2 diabetes-associated variants were tested for enhancer activity using luciferase reporter assays. One SNP, rs11257655, displayed allelic differences in transcriptional enhancer activity in 832/13 and MIN6 insulinoma cells as well as in human HepG2 hepatocellular carcinoma cells. The rs11257655 risk allele T showed greater transcriptional activity than the non-risk allele C in all cell types tested. Using electromobility shift and supershift assays we demonstrated that the rs11257655 risk allele showed allele-specific binding to FOXA1 and FOXA2. We validated FOXA1 and FOXA2 enrichment at the rs11257655 risk allele using allele-specific ChIP in human islets. These results suggest that rs11257655 affects transcriptional activity through altered binding of a protein complex that includes FOXA1 and FOXA2, providing a potential molecular mechanism at this GWAS locus.