Human population isolates provide a snapshot of the impact of historical demographic processes on population genetics. Such data facilitate studies of the functional impact of rare sequence variants on biomedical phenotypes, as strong genetic drift can result in higher frequencies of variants that are otherwise rare. We present the first whole genome sequencing (WGS) study of the VIKING cohort, a representative collection of samples from the isolated Shetland population in northern Scotland, and explore how its genetic characteristics compare to a mainland Scottish population. Our analyses reveal the strong contributions played by the founder effect and genetic drift in shaping genomic variation in the VIKING cohort. About one tenth of all high-quality variants discovered are unique to the VIKING cohort or are seen at frequencies at least ten fold higher than in more cosmopolitan control populations. Multiple lines of evidence also suggest relaxation of purifying selection during the evolutionary history of the Shetland isolate. We demonstrate enrichment of ultra-rare VIKING variants in exonic regions and for the first time we also show that ultra-rare variants are enriched within regulatory regions, particularly promoters, suggesting that gene expression patterns may diverge relatively rapidly in human isolates.