Modern experiments at isotope separator on-line (ISOL) facilities like ISAC at TRIUMF often depend critically on the purity of the delivered rare isotope beams. Therefore, highly selective ion sources are essential. This article presents the development and successful on-line operation of an ion guide laser ion source (IG-LIS) for the production of ion beams free of isobaric contamination. Thermionic ions from the hot ISOL target are suppressed by an electrostatic potential barrier, while neutral radio nuclides effusing out are resonantly ionized by laser radiation within a quadrupole ion guide behind this barrier. The IG-LIS was developed through detailed thermal and ion optics simulation studies and off-line tests with stable isotopes. In a first on-line run with a SiC target a suppression of surface-ionized Na contaminants in the ion beam of up to six orders of magnitude was demonstrated.