Multilocus analysis of single-nucleotide-polymorphism (SNP) haplotypes may provide evidence of association with disease, even when the individual loci themselves do not. Haplotype-based methods are expected to outperform single-SNP analyses because (i) common genetic variation can be structured into haplotypes within blocks of strong linkage disequilibrium and (ii) the functional properties of a protein are determined by the linear sequence of amino acids corresponding to DNA variation on a haplotype. Here, I propose a flexible Bayesian framework for modeling haplotype association with disease in population-based studies of candidate genes or small candidate regions. I employ a Bayesian partition model to describe the correlation between marker-SNP haplotypes and causal variants at the underlying functional polymorphism(s). Under this model, haplotypes are clustered according to their similarity, in terms of marker-SNP allele matches, which is used as a proxy for recent shared ancestry. Haplotypes within a cluster are then assigned the same probability of carrying a causal variant at the functional polymorphism(s). In this way, I can account for the dominance effect of causal variants, here corresponding to any deviation from a multiplicative contribution to disease risk. The results of a detailed simulation study demonstrate that there is minimal cost associated with modeling these dominance effects, with substantial gains in power over haplotype-based methods that do not incorporate clustering and that assume a multiplicative model of disease risks.