Molecular diagnostics is a cornerstone of modern precision medicine, broadly understood as tailoring an individual's treatment, follow-up, and care based on molecular data. In rare diseases (RDs), molecular diagnoses reveal valuable information about the cause of symptoms, disease progression, familial risk, and in certain cases, unlock access to targeted therapies. Due to decreasing DNA sequencing costs, genome sequencing (GS) is emerging as the primary method for precision diagnostics in RDs. Several ongoing European initiatives for precision medicine have chosen GS as their method of choice. Recent research supports the role for GS as first-line genetic investigation in individuals with suspected RD, due to its improved diagnostic yield compared to other methods. Moreover, GS can detect a broad range of genetic aberrations including those in noncoding regions, producing comprehensive data that can be periodically reanalyzed for years to come when further evidence emerges. Indeed, targeted drug development and repurposing of medicines can be accelerated as more individuals with RDs receive a molecular diagnosis. Multidisciplinary teams in which clinical specialists collaborate with geneticists, genomics education of professionals and the public, and dialogue with patient advocacy groups are essential elements for the integration of precision medicine into clinical practice worldwide. It is also paramount that large research projects share genetic data and leverage novel technologies to fully diagnose individuals with RDs. In conclusion, GS increases diagnostic yields and is a crucial step toward precision medicine for RDs. Its clinical implementation will enable better patient management, unlock targeted therapies, and guide the development of innovative treatments.