Macular telangiectasia type 2 (MacTel) is a progressive, late-onset retinal degenerative disease linked to decreased serum levels of serine that elevate circulating levels of a toxic ceramide species, deoxysphingolipids (deoxySLs); however, causal genetic variants that reduce serine levels in patients have not been identified. Here we identify rare, functional variants in the gene encoding the rate-limiting serine biosynthetic enzyme, phosphoglycerate dehydrogenase (PHGDH), as the single locus accounting for a significant fraction of MacTel. Under a dominant collapsing analysis model of a genome-wide enrichment analysis of rare variants predicted to impact protein function in 793 MacTel cases and 17,610 matched controls, the PHGDH gene achieves genome-wide significance (P = 1.2 × 10⁻¹³) with variants explaining ~3.2% of affected individuals. We further show that the resulting functional defects in PHGDH cause decreased serine biosynthesis and accumulation of deoxySLs in retinal pigmented epithelial cells. PHGDH is a significant locus for MacTel that explains the typical disease phenotype and suggests a number of potential treatment options.