The Lundehund is an old dog breed with remarkable anatomical features including polydactyly in all four limbs and extraordinary flexibility of the spine. We genotyped 28 Lundehund using the canine Illumina high density beadchip to estimate the effective population size (Ne) and inbreeding coefficients as well as to identify potential regions of positive selection. The decay of linkage disequilibrium was slow with r2 = 0.95 in 50 kb distance. The last 7-200 generations ago, Ne was at 10-13. An increase of Ne was noted in the very recent generations with a peak value of 19 for Ne at generation 4. The FROH estimated for 50-, 65- and 358-SNP windows were 0.87, 087 and 0.81, respectively. The most likely estimates for FROH after removing identical-by-state segments due to linkage disequilibria were at 0.80-0.81. The extreme loss of heterozygosity has been accumulated through continued inbreeding over 200 generations within a probably closed population with a small effective population size. The mean inbreeding coefficient based on pedigree data for the last 11 generations (FPed = 0.10) was strongly biased downwards due to the unknown coancestry of the founders in this pedigree data. The long-range haplotype test identified regions with genes involved in processes of immunity, olfaction, woundhealing and neuronal development as potential targets of selection. The genes QSOX2, BMPR1B and PRRX2 as well as MYOM1 are candidates for selection on the Lundehund characteristics small body size, increased number of digits per paw and extraordinary mobility, respectively.