It is well established that variations in genes can alter the pharmacokinetic and pharmacodynamic profile of a drug and immunological responses to it. Early advances in pharmacogenetics were made with traditional genetic techniques such as functional cloning of genes using knowledge gained from purified proteins, and candidate gene analysis. Over the past decade, techniques for analysing the human genome have accelerated greatly as knowledge and technological capabilities have grown. These techniques were initially focussed on understanding genetic factors of disease, but increasingly they are helping to clarify the genetic basis of variable drug responses and adverse drug reactions (ADRs). We examine genetic methods that have been applied to the understanding of ADRs, review the current state of knowledge of genetic factors that influence ADR development, and discuss how the application of genome-wide association studies and next-generation sequencing approaches is supporting and extending existing knowledge of pharmacogenetic processes leading to ADRs. Such approaches have identified single genes that are major contributing genetic risk factors for an ADR, (such as flucloxacillin and drug-induced liver disease), making pre-treatment testing a possibility. They have contributed to the identification of multiple genetic determinants of a single ADR, some involving both pharmacologic and immunological processes (such as phenytoin and severe cutaneous adverse reactions). They have indicated that rare genetic variants, often not previously reported, are likely to have more influence on the phenotype than common variants that have been traditionally tested for. The problem of genotype/phenotype discordance affecting the interpretation of pharmacogenetic screening and the future of genome-based testing applied to ADRs are also discussed.