Here we describe the insights gained from sequencing the whole genomes of 2,636 Icelanders to a median depth of 20×. We found 20 million SNPs and 1.5 million insertions-deletions (indels). We describe the density and frequency spectra of sequence variants in relation to their functional annotation, gene position, pathway and conservation score. We demonstrate an excess of homozygosity and rare protein-coding variants in Iceland. We imputed these variants into 104,220 individuals down to a minor allele frequency of 0.1% and found a recessive frameshift mutation in MYL4 that causes early-onset atrial fibrillation, several mutations in ABCB4 that increase risk of liver diseases and an intronic variant in GNAS associating with increased thyroid-stimulating hormone levels when maternally inherited. These data provide a study design that can be used to determine how variation in the sequence of the human genome gives rise to human diversity.