Recent progress in the field of topological states of matter(1,2) has largely been initiated by the discovery of bismuth and antimony chalcogenide bulk topological insulators (TIs)(3-6), followed by closely related ternary compounds(7-16) and predictions of several weak TIs(17-19). However, both the conceptual richness of Z$_2$ classification of TIs as well as their structural and compositional diversity are far from being fully exploited. Here, a new Z$_2$ topological insulator is theoretically predicted and experimentally confirmed in the $beta$-phase of quasi-one-dimensional bismuth iodide Bi$_4$I$_4$. The electronic structure of $beta$-Bi$_4$I$_4$, characterized by Z$_2$ invariants (1;110), is in proximity of both the weak TI phase (0;001) and the trivial insulator phase (0;000). Our angle-resolved photoemission spectroscopy measurements on the (001) surface reveal a highly anisotropic band-crossing feature located at the point of the surface Brillouin zone and showing no dispersion with the photon energy, thus being fully consistent with the theoretical prediction.
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