Massively parallel sequencing has revolutionized our understanding of Mendelian disorders, and many novel genes have been discovered to cause disease phenotypes when mutant. At the same time, next-generation sequencing approaches have enabled non-invasive prenatal testing of free fetal DNA in maternal blood. However, little attention has been paid to using whole exome and genome sequencing strategies for gene identification in fetal disorders that are lethal in utero, because they can appear to be sporadic and Mendelian inheritance may be missed. We present challenges and advantages of applying next-generation sequencing approaches to gene discovery in fetal malformation phenotypes and review recent successful discovery approaches. We discuss the implication and significance of recessive inheritance and cross-species phenotyping in fetal lethal conditions. Whole exome sequencing can be used in individual families with undiagnosed lethal congenital anomaly syndromes to discover causal mutations, provided that prior to data analysis, the fetal phenotype can be correlated to a particular developmental pathway in embryogenesis. Cross-species phenotyping allows providing further evidence for causality of discovered variants in genes involved in those extremely rare phenotypes and will increase our knowledge about normal and abnormal human developmental processes. Ultimately, families will benefit from the option of early prenatal diagnosis.