Capecitabine‐induced hand‐foot syndrome (CiHFS) is a common dermatological adverse reaction affecting around 30% of patients with capecitabine‐treated cancer, and the main cause of dose reductions and chemotherapy delays. To identify novel genetic factors associated with CiHFS in patients with cancer, we carried out an extreme‐phenotype genomewide association study in 166 patients with breast and colorectal capecitabine‐treated cancer with replication in a second cohort of 85 patients. We discovered and replicated a cluster of four highly correlated single‐nucleotide polymorphisms associated with susceptibility to CiHFS at 20q13.33 locus (top hit = rs6129058, hazard ratio = 2.40, 95% confidence interval = 1.78–3.20; P = 1.2 × 10⁻⁸). Using circular chromosome conformation capture sequencing, we identified a chromatin contact between the locus containing the risk alleles and the promoter of CDH4, located 90 kilobases away. The risk haplotype was associated with decreased levels of CDH4 mRNA and the protein it encodes, R‐cadherin (RCAD), which mainly localizes in the granular layer of the epidermis. In human keratinocytes, CDH4 downregulation resulted in reduced expression of involucrin, a protein of the cornified envelope, an essential structure for skin barrier function. Immunohistochemical analyses revealed that skin from patients with severe CiHFS exhibited low levels of RCAD and involucrin before capecitabine treatment. Our results uncover a novel mechanism underlying individual genetic susceptibility to CiHFS with implications for clinically relevant risk prediction.