Common genetic risk variants identified by genome-wide association studies have explained a small portion of disease heritability in complex diseases. It is becoming apparent that each gene/locus is heterogeneous and that multiple rare independent risk alleles across the population contribute to disease risk. Next-generation sequencing technologies have reached the maturity and low cost necessary to perform whole genome, whole exome, and targeted region sequencing to identify all rare risk alleles across a population, a task that is not possible to achieve by genotyping. Design of whole genome, whole exome, and targeted sequencing projects to identify disease variants for complex lung diseases requires four main steps: library preparation, sequencing, sequence data analysis, and statistical analysis. Although data analysis approaches are still evolving, a number of published studies have successfully identified rare variants associated with complex disease. Despite many challenges that lie ahead in applying these technologies to lung disease, rare variants are likely to be a critical piece of the puzzle that needs to be solved to understand the genetic basis of complex lung disease and to use this information to develop better therapies.