Identifying interactions between genetics and the environment (GxE) remains challenging. We have developed EAGLE, a hierarchical Bayesian model for identifying GxE interactions based on association between environment and allele-specific expression (ASE). Combining RNA-sequencing of whole blood and extensive environmental annotations collected from 922 human individuals, we identified 35 GxE interactions, compared to only four using standard GxE testing. EAGLE provides new opportunities to identify GxE interactions using functional genomic data.