The IgE associated locus on human chromosome 13q14 influencing asthma related traits contains the genes PHF11 and SETDB2. SETDB2 is located in the same linkage disequilibrium region as PHF11 and polymorphisms within SETDB2 have been shown to associate with total serum IgE levels. In this report, we sequenced the 15 exons of SETDB2 and identified a single previously un-genotyped mutation (AT/G, rs386770867) in the 5’ untranslated region (UTR) of the gene. The polymorphism was found to be significantly associated with serum IgE levels in our asthma cohort (P = 0.0012). Electrophoretic mobility shift assays (EMSA) revealed that the transcription factor YY1 binds to the AT allele whilst SRY binds to the G allele. Allele-specific transcription analysis (allelotyping) was performed in 35 individuals heterozygous for rs386770867 from a panel of 200 British families ascertained through probands with severe Stage 3 asthma. The AT allele was found to be significantly over expressed in these individuals (P = 1.26 x 10-21). A dual luciferase assay with the pGL3 Luciferase report gene showed that the AT allele significantly affects transcriptional activities. Our results indicate the IgE-associated AT/G polymorphism (rs386770867) regulates transcription of SETDB2.