In order to resolve a multiple sclerosis (MS) susceptibility locus that we had identified in earlier work at the telomeric end of the HLA complex, we genotyped another 34 microsatellite markers (47 in total) across the class I/extended class I region in 166 Tasmanian MS case and 104 control families (D6S299-D6S265). Extended MS susceptibility haplotypes, up to 9 Mb in length, were observed in 11% of MS cases and 4% of controls. Direct comparison of the telomerically extended portion of the MS susceptibility haplotype in HFE-Cys282Tyr (C282Y)-homozygous haemochromatosis patients identified a common ancestry for this genomic segment, which translated into an increased frequency of the C282Y allele in 489 MS cases from Tasmania and Victoria (10.2%) compared with controls (6.7%). Six C282Y homozygotes (1.2%), a three-fold increased rate over the general population, and 88 heterozygotes (18%) were identified. One C282Y-homozygous female was identified who had MS and was being treated for symptoms of iron overload. Interestingly, for 71 Victorian MS cases not of north western European (NWE) ancestry, a DR15-independent reduction in the frequency of the C282Y allele was observed, supporting the theory of a NWE origin for the C282Y-variant of the DR15 ancestral haplotype (C282Y-HLA-A*0301-B*0702-DRB1* 1501-DQB1*0602). The results of linkage disequilibrium (LD) and log linear modelling analyses suggest that C282Y is increased in MS cases of NWE ancestry because it is in LD with the ancestral DR15 susceptibility haplotype (7.1) and that it does not play an independent role in predisposition to MS. However, our findings provide the impetus for further investigations into the role of iron metabolism in the severity of MS.