While next-generation sequencing has accelerated the discovery of human disease genes, progress has been largely limited to the “low hanging fruit” of mutations with obvious exonic coding or canonical splice site impact. In contrast, the lack of high-throughput, unbiased approaches for functional assessment of most noncoding variants has bottlenecked gene discovery. We report the integration of transcriptome sequencing (RNA-seq), which surveys all mRNAs to reveal functional impacts of variants at the transcription level, into the gene discovery framework for a unique human disease, microcephaly-micromelia syndrome (MMS). MMS is an autosomal recessive condition described thus far in only a single First Nations population and causes intrauterine growth restriction, severe microcephaly, craniofacial anomalies, skeletal dysplasia, and neonatal lethality. Linkage analysis of affected families, including a very large pedigree, identified a single locus on Chromosome 21 linked to the disease (LOD > 9). Comprehensive genome sequencing did not reveal any pathogenic coding or canonical splicing mutations within the linkage region but identified several nonconserved noncoding variants. RNA-seq analysis detected aberrant splicing in DONSON due to one of these noncoding variants, showing a causative role for DONSON disruption in MMS. We show that DONSON is expressed in progenitor cells of embryonic human brain and other proliferating tissues, is co-expressed with components of the DNA replication machinery, and that Donson is essential for early embryonic development in mice as well, suggesting an essential conserved role for DONSON in the cell cycle. Our results demonstrate the utility of integrating transcriptomics into the study of human genetic disease when DNA sequencing alone is not sufficient to reveal the underlying pathogenic mutation.