Many inherited conditions cause cholestasis in the neonate or infant. Next-generation sequencing methods can facilitate a prompt diagnosis in some of these cases; application of these methods in patients with liver diseases of unknown cause has also uncovered novel gene-disease associations and improved our understanding of physiological bile secretion and flow. By helping to define the molecular basis of certain cholestatic disorders, these methods have also identified new targets for therapy as well patient subgroups more likely to benefit from specific therapies. At the same time, sequencing methods have presented new diagnostic challenges, such as the interpretation of single heterozygous genetic variants. This article discusses those challenges in the context of neonatal and infantile cholestasis, focusing on difficulties in predicting variant pathogenicity, the possibility of other causal variants not identified by the genetic screen used, and phenotypic variability among patients with variants in the same genes. A prospective, observational study performed between 2010–2013, which sequenced six important genes (ATP8B1, ABCB11, ABCB4, NPC1, NPC2 and SLC25A13) in an international cohort of 222 patients with infantile liver disease, is given as an example of potential benefits and challenges that clinicians could face having received a complex genetic result. Further studies including large cohorts of patients with paediatric liver disease are needed to clarify the spectrum of phenotypes associated with, as well as appropriate clinical response to, single heterozygous variants in cholestasis-associated genes.