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Chromosome 5p15.33 has been identified as a lung cancer susceptibility locus, however the underlying causal mechanisms were not fully elucidated. Previous fine-mapping studies of this locus have relied on imputation or investigated a small number of known, common variants. This study represents a significant advance over previous research by investigating a large number of novel, rare variants, as well as their underlying mechanisms through telomere length. Variants for this fine-mapping study were identified through a targeted deep sequencing (average depth of coverage greater than 4000×) of 576 individuals. Subsequently, 4652 SNPs, including 1108 novel SNPs, were genotyped in 5164 cases and 5716 controls of European ancestry. After adjusting for known risk loci, rs2736100 and rs401681, we identified a new, independent lung cancer susceptibility variant in LPCAT1: rs139852726 (OR = 0.46, P = 4.73×10(-9)), and three new adenocarcinoma risk variants in TERT: rs61748181 (OR = 0.53, P = 2.64×10(-6)), rs112290073 (OR = 1.85, P = 1.27×10(-5)), rs138895564 (OR = 2.16, P = 2.06×10(-5); among young cases, OR = 3.77, P = 8.41×10(-4)). In addition, we found that rs139852726 (P = 1.44×10(-3)) was associated with telomere length in a sample of 922 healthy individuals. The gene-based SKAT-O analysis implicated TERT as the most relevant gene in the 5p15.33 region for adenocarcinoma (P = 7.84×10(-7)) and lung cancer (P = 2.37×10(-5)) risk. In this largest fine-mapping study to investigate a large number of rare and novel variants within 5p15.33, we identified novel lung and adenocarcinoma susceptibility loci with large effects and provided support for the role of telomere length as the potential underlying mechanism.