Using Icelandic whole-genome sequence data and an imputation approach we searched for rare sequence variants in CHRNA4 and tested them for association with nicotine dependence. We show that carriers of a rare missense variant (allele frequency = 0.24%) within CHRNA4, encoding an R336C substitution, have greater risk of nicotine addiction than non-carriers as assessed by the Fagerstrom Test for Nicotine Dependence (P = 1.2 × 10−4). The variant also confers risk of several serious smoking-related diseases previously shown to be associated with the D398N substitution in CHRNA5. We observed odds ratios (ORs) of 1.7–2.3 for lung cancer (LC; P = 4.0 × 10−4), chronic obstructive pulmonary disease (COPD; P = 9.3 × 10−4), peripheral artery disease (PAD; P = 0.090) and abdominal aortic aneurysms (AAAs; P = 0.12), and the variant associates strongly with the early-onset forms of LC (OR = 4.49, P = 2.2 × 10 −4), COPD (OR = 3.22, P = 2.9 × 10−4), PAD (OR = 3.47, P = 9.2 × 10−3) and AAA (OR = 6.44, P = 6.3 × 10–3). Joint analysis of the four smoking-related diseases reveals significant association (P = 6.8 × 10−5), particularly for early-onset cases (P= 2.1 × 10−7). Our results are in agreement with functional studies showing that the human α4β2 isoform of the channel containing R336C has less sensitivity for its agonists than the wild-type form following nicotine incubation.