Genome-wide association studies (GWAS) have traditionally been undertaken in homogeneous populations from the same ancestry group. However, with the increasing availability of GWAS in large-scale multi-ethnic cohorts, we have evaluated a framework for detecting association of genetic variants with complex traits, allowing for population structure, and developed a powerful test of heterogeneity in allelic effects between ancestry groups. We have applied the methodology to identify and characterise loci associated with susceptibility to type 2 diabetes (T2D) using GWAS data from the Resource for Genetic Epidemiology on Adult Health and Aging, a large multi-ethnic population-based cohort, created for investigating the genetic and environmental basis of age-related diseases. We identified a novel locus for T2D susceptibility at genome-wide significance (P<5 × 10(-8)) that maps to TOMM40-APOE, a region previously implicated in lipid metabolism and Alzheimer's disease. We have also confirmed previous reports that single-nucleotide polymorphisms at the TCF7L2 locus demonstrate the greatest extent of heterogeneity in allelic effects between ethnic groups, with the lowest risk observed in populations of East Asian ancestry.