Primary hyperparathyroidism (PHPT) is a common endocrine disease characterized by parathyroid hormone excess and hypercalcemia and caused by hypersecreting parathyroid glands. Familial PHPT occurs in an isolated nonsyndromal form, termed familial isolated hyperparathyroidism (FIHP), or as part of a syndrome, such as multiple endocrine neoplasia type 1 or hyperparathyroidism-jaw tumor syndrome. The specific genetic or other cause(s) of FIHP are unknown. We performed exome sequencing on germline DNA of eight index-case individuals from eight unrelated kindreds with FIHP. Selected rare variants were assessed for co-segregation in affected family members and screened for in an additional 32 kindreds with FIHP. In eight kindreds with FIHP, we identified three rare missense variants in GCM2, a gene encoding a transcription factor required for parathyroid development. Functional characterization of the GCM2 variants and deletion analyses revealed a small C-terminal conserved inhibitory domain (CCID) in GCM2. Two of the three rare variants were recurrent, located in the GCM2 CCID, and found in seven of the 40 (18%) kindreds with FIHP. These two rare variants acted as gain-of-function mutations that increased the transcriptional activity of GCM2, suggesting that GCM2 is a parathyroid proto-oncogene. Our results demonstrate that germline-activating mutations affecting the CCID of GCM2 can cause FIHP.