We previously reported that SNPs in intron 2 of OPRK1, the gene encoding the KOR, were associated with alcohol dependence; three synonymous SNPs were not associated (17). To better understand this association, we sequenced DNA from individuals with higher risk and lower risk alleles to detect additional genetic variations. Sequencing revealed several novel SNPs along with an indel upstream of the translation start site. This indel, at −1986, added a net 830 bp of sequence and was present in the sequenced individuals who were alcohol dependent. The indel was in high LD with most of the SNPs that we had previously reported associated with alcohol dependence (17). Here we demonstrate that the 5′ region of OPRK1 can function as a promoter in vitro. We then analyzed the effect of the indel on gene expression. Presence of this indel reduced transcription by nearly half. Genotyping and family-based analysis of our data set of multiplex alcohol-dependent families demonstrated that this indel was significantly associated with alcoholism. Therefore, we conclude that this indel is a functional variation that explains at least part of the association of OPRK1 with alcoholism.