New technologies in genetic diagnostics have revolutionized the understanding and management of rare diseases. This review highlights the significant advances and latest developments in genetic diagnostics in inborn errors of immunity (IEI), which encompass a diverse group of disorders characterized by defects in the immune system, leading to increased susceptibility to infections, autoimmunity, autoinflammatory diseases, allergies, and malignancies. Various diagnostic approaches, including targeted gene sequencing panels, whole exome sequencing, whole genome sequencing, RNA sequencing, or proteomics, have enabled the identification of causative genetic variants of rare diseases. These technologies not only facilitated the accurate diagnosis of IEI but also provided valuable insights into the underlying molecular mechanisms. Emerging technologies, currently mainly used in research, such as optical genome mapping, single cell sequencing or the application of artificial intelligence will allow even more insights in the aetiology of hereditary immune defects in the near future. The integration of genetic diagnostics into clinical practice significantly impacts patient care. Genetic testing enables early diagnosis, facilitating timely interventions and personalized treatment strategies. Additionally, establishing a genetic diagnosis is necessary for genetic counselling and prognostic assessments. Identifying specific genetic variants associated with inborn errors of immunity also paved the way for the development of targeted therapies and novel therapeutic approaches. This review emphasizes the challenges related with genetic diagnosis of rare diseases and provides future directions, specifically focusing on IEI. Despite the tremendous progress achieved over the last years, several obstacles remain or have become even more important due to the increasing amount of genetic data produced for each patient. This includes, first and foremost, the interpretation of variants of unknown significance (VUS) in known IEI genes and of variants in genes of unknown significance (GUS). Although genetic diagnostics have significantly contributed to the understanding and management of IEI and other rare diseases, further research, exchange between experts from different clinical disciplines, data integration and the establishment of comprehensive guidelines are crucial to tackle the remaining challenges and maximize the potential of genetic diagnostics in the field of rare diseases, such as IEI.