Translation of noncoding common variant association signals into meaningful molecular and biological mechanisms explaining disease susceptibility remains challenging. For the type 2 diabetes association signal in JAZF1 intron 1, we hypothesized that the underlying risk variants have cis-regulatory effects in islets or other type 2 diabetes-relevant cell types. We used maps of experimentally predicted open chromatin regions to prioritize variants for functional follow-up studies of transcriptional activity. Twelve regions containing type 2 diabetes-associated variants were tested for enhancer activity in 832/13 and MIN6 insulinoma cells. Three regions exhibited enhancer activity and only rs1635852 displayed allelic differences in enhancer activity; the type 2 diabetes risk allele T showed lower transcriptional activity than the nonrisk allele C. This risk allele showed increased binding to protein complexes, suggesting that it functions as part of a transcriptional repressor complex. We applied DNA affinity capture to identify factors in the complex and determined that the risk allele preferentially binds the pancreatic master regulator PDX1. These data suggest that the rs1635852 region in JAZF1 intron 1 is part of a cis-regulatory complex and that maps of open chromatin are useful to guide identification of variants with allelic differences in regulatory activity at type 2 diabetes loci.