Resequencing genes in individuals at extremes of the population distribution constitutes a powerful and efficient strategy to identify sequence variants associated with complex traits. An excess of sequence variants at one extreme relative to the other that is not due to chance or to population stratification constitutes evidence for genetic association and implies the presence of functionally significant sequence variants. Recently, we reported that non-synonymous sequence variants in Niemann–Pick type C1-like 1 (NPC1L1), an intestinal cholesterol transporter, were significantly more common among individuals with low cholesterol absorption than in those with high cholesterol absorption. To determine whether sequence variations identified in individuals with low cholesterol absorption affect protein function, we performed studies in cultured cells and in families. Expression of the mutant proteins in Chinese hamster ovarian-K1 cells revealed that a majority (14 of 20) of the variants identified in low absorbers were associated with very low levels of NPC1L1 protein. In two extended families, mean cholesterol absorption levels, as measured using stable isotopes, were significantly lower in family members with the sequence variants than in those without the variant. These data indicate that the excess of sequence variations in individuals with extreme phenotypes reflects an enrichment of functionally significant variants. These findings are consistent with in silico predictions that some sequence variations found in healthy individuals are as deleterious to protein function as mutations that, in other genes, cause monogenic diseases. Such sequence variations may explain a significant fraction of quantitative phenotypic variation in humans.