Most medicinal plants are sources for the production of valuable natural products. Major natural products possessing pharmacological properties are secondary metabolites of medicinal plants. However, transcriptomes/genomes of most medicinal plants are not available, which hinders biological research on the biosynthetic mechanism of these bioactive secondary metabolites. Transcriptome analysis is a promising tool to illustrate biological processes, such as the biosynthesis of bioactive compounds, growth and development and genetic diversity of medicinal plants. Next‐generation sequencing (NGS) technologies, including second‐generation sequencing (SGS) and third‐generation sequencing (TGS) (e.g. PacBio) technologies, are suitable for the transcriptome analysis of medicinal plants. NGS sequencing is advantageous for the identification of gene expression profiling and facilitates reliable discoveries of secondary metabolite biosynthetic pathway‐related genes. Recently, hybrid sequencing strategies integrating the strength of SGS and PacBio sequencing have made much transcriptome information available. Additionally, NGS sequencing technologies aids in the direct detection of genetic markers and alternative splicing events related to the biosynthesis of secondary metabolites, which facilitates fast‐track breeding of medicinal plants.