While the role of common genetic variants in multiple sclerosis (MS) has been elucidated in large genome-wide association studies, the contribution of rare variants to the disease remains unclear. Herein, a whole-genome sequencing study in four affected and four healthy relatives of a consanguineous Italian family identified a novel missense c.1801T > C (p.S601P) variant in the GRAMD1B gene that is shared within MS cases and resides under a linkage peak (LOD: 2.194). Sequencing GRAMD1B in 91 familial MS cases revealed two additional rare missense and two splice-site variants, two of which (rs755488531 and rs769527838) were not found in 1000 Italian healthy controls. Functional studies demonstrated that GRAMD1B, a gene with unknown function in the central nervous system (CNS), is expressed by several cell types, including astrocytes, microglia and neurons as well as by peripheral monocytes and macrophages. Notably, GRAMD1B was downregulated in vessel-associated astrocytes of active MS lesions in autopsied brains and by inflammatory stimuli in peripheral monocytes, suggesting a possible role in the modulation of inflammatory response and disease pathophysiology.