Gene mapping studies have consistently identified a susceptibility locus for atopic dermatitis and other inflammatory diseases on chromosome 11q13.5, with the strongest association observed for a common variant located in an intergenic region between the two annotated genes chromosome 11 open reading frame 30 (C11orf30) and leucine rich repeat containing 32 (LRRC32). Using a targeted resequencing approach we identified low-frequency and rare missense mutations within the LRRC32 gene encoding the glycoprotein A repetitions predominantly (GARP), a receptor on activated regulatory T cells that binds latent TGFβ. Subsequent association testing in more than 2,000 atopic dermatitis cases and 2,000 controls revealed a significant excess of these LRRC32 variants in individuals with atopic dermatitis. Structural protein modelling and bioinformatic analysis predicted a disruption of protein transport upon these variants, and overexpression assays in CD4(+)CD25(-) T cells showed a significant reduction in surface expression of the mutated protein. Consistently, flow cytometric (FACS) analyses of different T cell subtypes obtained from AD patients revealed a significantly reduced surface expression of GARP, and a reduced conversion of CD4(+)CD25(-) T cells into regulatory T cells along with lower expression of latency-associated protein (LAP) upon stimulation in carriers of the LRRC32 A407T variant. These results link inherited disturbances of TGFβ signalling with atopic dermatitis risk.