Although it is ubiquitous in genomics, the current human reference genome (GRCh38) is incomplete: It is missing large sections of heterochromatic sequence, and as a singular, linear reference genome, it does not represent the full spectrum of human genetic diversity. To characterize gaps in GRCh38 and human genetic diversity, we developed an algorithm for sequence location approximation using nuclear families (ASLAN) to identify the region of origin of reads that do not align to GRCh38. Using unmapped reads and variant calls from whole-genome sequences (WGSs), ASLAN uses a maximum likelihood model to identify the most likely region of the genome that a subsequence belongs to given the distribution of the subsequence in the unmapped reads and phasings of families. Validating ASLAN on synthetic data and on reads from the alternative haplotypes in the decoy genome, ASLAN localizes >90% of 100-bp sequences with >92% accuracy and ∼1 Mb of resolution. We then ran ASLAN on 100-mers from unmapped reads from WGS from more than 700 families, and compared ASLAN localizations to alignment of the 100-mers to the recently released T2T-CHM13 assembly. We found that many unmapped reads in GRCh38 originate from telomeres and centromeres that are gaps in GRCh38. ASLAN localizations are in high concordance with T2T-CHM13 alignments, except in the centromeres of the acrocentric chromosomes. Comparing ASLAN localizations and T2T-CHM13 alignments, we identified sequences missing from T2T-CHM13 or sequences with high divergence from their aligned region in T2T-CHM13, highlighting new hotspots for genetic diversity.