Low bone mineral density (BMD) is used as a parameter of osteoporosis. Genome-wide association studies of BMD have hitherto focused on BMD as a quantitative trait, yielding common variants of small effects that contribute to the population diversity in BMD. Here we use BMD as a dichotomous trait, searching for variants that may have a direct effect on the risk of pathologically low BMD rather than on the regulation of BMD in the healthy population. Through whole-genome sequencing of Icelandic individuals, we found a rare nonsense mutation within the leucine-rich-repeat-containing G-protein-coupled receptor 4 (LGR4) gene (c.376C>T) that is strongly associated with low BMD, and with osteoporotic fractures. This mutation leads to termination of LGR4 at position 126 and fully disrupts its function. The c.376C>T mutation is also associated with electrolyte imbalance, late onset of menarche and reduced testosterone levels, as well as an increased risk of squamous cell carcinoma of the skin and biliary tract cancer. Interestingly, the phenotype of carriers of the c.376C>T mutation overlaps that of Lgr4 mutant mice.