Immunoregulatory cytokine interleukin-10 (IL-10) is elevated in sera from patients with systemic lupus erythematosus (SLE) correlating with disease activity. The established association of IL10 with SLE and other autoimmune diseases led us to fine map causal variant(s) and to explore underlying mechanisms. We assessed 19 tag SNPs, covering the IL10 gene cluster including IL19, IL20 and IL24, for association with SLE in 15,533 case and control subjects from four ancestries. The previously reported IL10 variant, rs3024505 located at 1 kb downstream of IL10, exhibited the strongest association signal and was confirmed for association with SLE in European American (EA) (P = 2.7×10-8, OR = 1.30), but not in non-EA ancestries. SNP imputation conducted in EA dataset identified three additional SLE-associated SNPs tagged by rs3024505 (rs3122605, rs3024493 and rs3024495 located at 9.2 kb upstream, intron 3 and 4 of IL10, respectively), and SLE-risk alleles of these SNPs were dose-dependently associated with elevated levels of IL10 mRNA in PBMCs and circulating IL-10 protein in SLE patients and controls. Using nuclear extracts of peripheral blood cells from SLE patients for electrophoretic mobility shift assays, we identified specific binding of transcription factor Elk-1 to oligodeoxynucleotides containing the risk (G) allele of rs3122605, suggesting rs3122605 as the most likely causal variant regulating IL10 expression. Elk-1 is known to be activated by phosphorylation and nuclear localization to induce transcription. Of interest, phosphorylated Elk-1 (p-Elk-1) detected only in nuclear extracts of SLE PBMCs appeared to increase with disease activity. Co-expression levels of p-Elk-1 and IL-10 were elevated in SLE T, B cells and monocytes, associated with increased disease activity in SLE B cells, and were best downregulated by ERK inhibitor. Taken together, our data suggest that preferential binding of activated Elk-1 to the IL10 rs3122605-G allele upregulates IL10 expression and confers increased risk for SLE in European Americans.