Their results are published on Thursday in the journal Science.
Researchers at the University College of Medicine in Cardiff examined over 400 pairs of siblings suffering from the disease and discovered that more than two-thirds of them had the gene in common.
Their results are published on Thursday in the journal Science.
Blood and saliva samples were taken from Alzheimer's sufferers and their DNA compared to each other.
The group at the University of Wales College of Medicine - led by Professor Mike Owen and Dr Julie Williams - now hope to expand on their work and find out exactly where the gene is and what it does, so that in the future there may be a treatment.
"This is one of the largest studies of its kind and involved many Welsh families, as well as families from two American research centres," said Dr Julie Williams.
The research has been funded by the Medical Research Council. The council has now decided to support the group further with another £1m to undertake the next phase of research.
Researchers have found that 64% of patients suffering from late onset Alzheimer's shared a common gene located on Chromosome 10.
'Better treatments'
Professor Owen said: "Our finding shows that there is at least one major gene for Alzheimer's disease in this region.
"Our next step is to identify the gene or genes involved.
"Identifying the genes that make some people more likely to develop Alzheimer's disease than others could eventually lead to new and better treatments for this cruel disease."
The researchers hope to study families with at least two Alzheimer's sufferers from areas of high population density. These will include Merthyr and Aberdare, the Gwent valleys and a network of collaborating centres in Cardiff.