A major challenge in evaluating the contribution of rare variants to complex disease is identifying enough copies of the rare alleles to permit informative statistical analysis. To investigate the contribution of rare variants to the risk of type 2 diabetes (T2D) and related traits, we performed deep whole-genome analysis of 1,034 members of 20 large Mexican-American families with high prevalence of T2D. If rare variants of large effect accounted for much of the diabetes risk in these families, our experiment was powered to detect association. Using gene expression data on 21,677 transcripts for 643 pedigree members, we identified evidence for large-effect rare-variant cis-expression quantitative trait loci that could not be detected in population studies, validating our approach. However, we did not identify any rare variants of large effect associated with T2D, or the related traits of fasting glucose and insulin, suggesting that large-effect rare variants account for only a modest fraction of the genetic risk of these traits in this sample of families. Reliable identification of large-effect rare variants will require larger samples of extended pedigrees or different study designs that further enrich for such variants.

Peroxisome proliferator-activated receptor gamma (PPARG) is a master transcriptional regulator of adipocyte differentiation and a canonical target of antidiabetic thiazolidinedione medications. In rare families, loss-of-function (LOF) mutations in PPARG are known to cosegregate with lipodystrophy and insulin resistance; in the general population, the common P12A variant is associated with a decreased risk of type 2 diabetes (T2D). Whether and how rare variants in PPARG and defects in adipocyte differentiation influence risk of T2D in the general population remains undetermined. By sequencing PPARG in 19,752 T2D cases and controls drawn from multiple studies and ethnic groups, we identified 49 previously unidentified, nonsynonymous PPARG variants (MAF < 0.5%). Considered in aggregate (with or without computational prediction of functional consequence), these rare variants showed no association with T2D (OR = 1.35; P = 0.17). The function of the 49 variants was experimentally tested in a novel high-throughput human adipocyte differentiation assay, and nine were found to have reduced activity in the assay. Carrying any of these nine LOF variants was associated with a substantial increase in risk of T2D (OR = 7.22; P = 0.005). The combination of large-scale DNA sequencing and functional testing in the laboratory reveals that approximately 1 in 1,000 individuals carries a variant in PPARG that reduces function in a human adipocyte differentiation assay and is associated with a substantial risk of T2D.