With increased speed and decreased costs, next-generation gene sequencing has the potential to improve medical care by making possible widespread evaluation of patients’ genomes in clinical settings. The entire genome of an individual can now be sequenced in less than 1 week at a cost of $5000 to $10 000; the cost will continue to decline. Analyses based on next-generation sequencing include whole-genome sequencing and whole-exome sequencing; DNA sequences that encode proteins are collectively known as the exome. In some instances, whole genome and whole-exome sequencing have already helped to accurately diagnose diseases with atypical manifestations, that are difficult to diagnose using clinical or laboratory criteria alone, or that otherwise require extensive or costly evaluation. For some patients with malignant neoplasms, next-generating sequencing can improve tumor classification, diagnosis, and management. Many challenges remain, however, such as the storage and interpretation of vast amounts of sequence data, training physicians and other health care professionals whose knowledge of genetics may be insufficient, effective genetic counseling and communication of results to patients, and establishing standards for the appropriate use of the technology. Rigorous studies are needed to assess the utility of whole-genome and whole-exome sequencing in large groups of patients, including comparative studies with other approaches to screening and diagnosis, and the evaluation of clinical end points and health care costs. The successes to date have been in single cases or in very small groups of patients. At present, although whole-genome or whole-exome sequencing show great promise, they should be incorporated into patient care only in limited clinical situations.