Common genetic variation at human 14q22.2 tagged by rs4444235 is significantly associated with colorectal cancer (CRC) risk. Re-sequencing was used to comprehensively annotate the 17kb region of strong linkage disequilibrium encompassing rs4444235. Through bioinformatic analyses using H3K4Me1, H3K4Me3, and DNase-I hypersensitivity chromatin signatures and evolutionary conservation we identified seven candidate disease-causing single-nucleotide polymorphisms mapping to six regions within the 17-kb region predicted to have regulatory potential. Reporter gene studies of these regions demonstrated that the element to which rs4444235 maps acts as an allele-specific transcriptional enhancer. Allele-specific expression studies in CRC cell lines heterozygous for rs4444235 showed significantly increased expression of bone morphogenetic protein-4 (BMP4) associated with the risk allele (P<0.001). These data provide evidence for a functional basis for the non-coding risk variant rs4444235 at 14q22.2 and emphasizes the importance of genetic variation in the BMP pathway genes as determinants of CRC risk.