Abstract Background: Rare, inherited mutations account for 5% to 10% of all prostate cancer cases. However, to date, few causative mutations have been identified. Methods: To identify rare mutations for prostate cancer, we conducted whole-exome sequencing (WES) in multiple kindreds (n = 91) from 19 hereditary prostate cancer (HPC) families characterized by aggressive or early-onset phenotypes. Candidate variants (n = 130) identified through family- and bioinformatics-based filtering of WES data were then genotyped in an independent set of 270 HPC families (n = 819 prostate cancer cases; n = 496 unaffected relatives) for replication. Two variants with supportive evidence were subsequently genotyped in a population-based case–control study (n = 1,155 incident prostate cancer cases; n = 1,060 age-matched controls) for further confirmation. All participants were men of European ancestry. Results: The strongest evidence was for two germline missense variants in the butyrophilin-like 2 (BTNL2) gene (rs41441651, p.Asp336Asn and rs28362675, p.Gly454Cys) that segregated with affection status in two of the WES families. In the independent set of 270 HPC families, 1.5% (rs41441651; P = 0.0032) and 1.2% (rs28362675; P = 0.0070) of affected men, but no unaffected men, carried a variant. Both variants were associated with elevated prostate cancer risk in the population-based study (rs41441651: OR, 2.7; 95% CI, 1.27–5.87; P = 0.010; rs28362675: OR, 2.5; 95% CI, 1.16–5.46; P = 0.019). Conclusions: Results indicate that rare BTNL2 variants play a role in susceptibility to both familial and sporadic prostate cancer. Impact: Results implicate BTNL2 as a novel prostate cancer susceptibility gene. Cancer Epidemiol Biomarkers Prev; 22(9); 1520–8. ©2013 AACR.