A rare disease is defined as a condition affecting fewer than 200 000 people in the United States by the Orphan Drug Act. For rare diseases, it is challenging to enroll a large number of patients and obtain all critical information to support drug approval through traditional clinical trial approaches. In addition, over half of the population affected by rare diseases are children, which presents additional drug development challenges. Thus, maximizing the use of all available data is in the interest of drug developers and regulators in rare diseases. This brings opportunities for model-informed drug development to use and integrate all available sources and knowledge to quantitatively assess the benefit/risk of a new product under development and to inform dosing. This review article provides an overview of 4 broad categories of use of model-informed drug development in drug development and regulatory decision making in rare diseases: optimizing dose regimen, supporting pediatric extrapolation, informing clinical trial design, and providing confirmatory evidence for effectiveness. The totality of evidence based on population pharmacokinetic simulation as well as exposure-response relationships for efficacy and safety, provides the regulatory ground for the approval of an unstudied dosing regimen in rare diseases without the need for additional clinical data. Given the practical and ethical challenges in drug development in rare diseases, model-informed approaches using all collective information (eg, disease, drug, placebo effect, exposure-response in nonclinical and clinical settings) are powerful and can be applied throughout the drug development stages to facilitate decision making.