The MDR1 multidrug transporter plays a key role in determining drug bioavailability, and differences in drug response exist amongst different ethnic groups. Numerous studies have identified an association between the MDR1 single nucleotide polymorphism (SNP) exon 26 3435C>T and differences in MDR1 function. We performed a haplotype analysis of the MDR1 gene in three major ethnic groups (Chinese, Malays and Indians) by examining 10 intragenic SNPs. Four were polymorphic in all three ethnic groups: one occurring in the non-coding region and three occurring in coding exons. All three coding SNPs (exon 12 1236C>T, exon 21 2677G>T/A and exon 26 3435C>T) were present in high frequency in each ethnic group, and the derived haplotype profiles exhibited distinct differences between the groups. Fewer haplotypes were observed in the Malays (n = 6) compared to the Chinese (n = 10) and Indians (n = 9). Three major haplotypes (> 10% frequency) were observed in the Malays and Chinese; of these, two were observed in the Indians. Strong linkage disequilibrium (LD) was detected between the three SNPs in all three ethnic groups. The strongest LD was present in the Chinese, followed by Indians and Malays, with the corresponding LD blocks estimated to be approximately 80 kb, 60 kb and 40 kb, respectively. These data strongly support the hypothesis that strong LD between the neutral SNP exon 26 3435C>T and a nearby unobserved causal SNP underlies the observed associations between the neutral SNP and MDR1 functional differences. Furthermore, strong LD between exon 26 3435T and different unobserved causal SNPs in different study populations may provide a plausible explanation for conflicting reports associating the same exon 26 3435T allele with different MDR1 functional changes.