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Over the last decade, the field of molecular diagnostics has undergone tremendous transformation, catalyzed by the clinical implementation of next generation sequencing (NGS). As technical capabilities are enhanced and current limitations are addressed, NGS is increasingly capable of detecting most variant types and will therefore continue to consolidate and simplify diagnostic testing. It is likely that genome sequencing will eventually serve as a universal first line test for disorders with a suspected genetic origin. Academic Medical Centers (AMCs), which have been at the forefront of this paradigm shift are now presented with challenges to keep up with increasing technical, bioinformatic and interpretive complexity of NGS-based tests in a highly competitive market. Additional complexity may arise from altered regulatory oversight, also triggered by the unprecedented scope of NGS-based testing, which requires new approaches. However, these challenges are balanced by unique opportunities, particularly at the interface between clinical and research operations, where AMCs can capitalize on access to cutting edge research environments and establish collaborations to facilitate rapid diagnostic innovation. This article reviews present and future challenges and opportunities for AMC associated molecular diagnostic laboratories from the perspective of the Partners HealthCare Laboratory for Molecular Medicine (LMM).