Although there has been much success in identifying genetic variants associated with common diseases using genome-wide association studies (GWAS)(1), it has been difficult to demonstrate which variants are causal and what role they have in disease. Moreover, the modest contribution that these variants make to disease risk has raised questions regarding their medical relevance(2). Here we have investigated a single nucleotide polymorphism (SNP) in the TNFRSF1A gene, that encodes tumour necrosis factor receptor 1 (TNFR1), which was discovered through GWAS to be associated with multiple sclerosis (MS)(3,4), but not with other autoimmune conditions such as rheumatoid arthritis(5), psoriasis(6) and Crohn's disease(7). By analysing MS GWAS(3,4) data in conjunction with the 1000 Genomes Project data(8) we provide genetic evidence that strongly implicates this SNP, rs1800693, as the causal variant in the TNFRSF1A region. We further substantiate this through functional studies showing that the MS risk allele directs expression of a novel, soluble form of TNFR1 that can block TNF. Importantly, TNF-blocking drugs can promote onset or exacerbation of MS9-11, but they have proven highly efficacious in the treatment of autoimmune diseases for which there is no association with rs1800693. This indicates that the clinical experience with these drugs parallels the disease association of rs1800693, and that the MS-associated TNFR1 variant mimics the effect of TNF-blocking drugs. Hence, our study demonstrates that clinical practice can be informed by comparing GWAS across common autoimmune diseases and by investigating the functional consequences of the disease-associated genetic variation.