Most genetic studies of asthma and allergy have focused on common variation in individuals primarily of European ancestry. Studying the role of rare variation in quantitative phenotypes and in asthma phenotypes in populations of diverse ancestries can provide additional, important insights into the development of these traits. We sought to examine the contribution of rare variants to different asthma- or allergy-associated quantitative traits in children with diverse ancestries and explore their role in asthma phenotypes. We examined whole-genome sequencing data from children participants in longitudinal studies of asthma (n = 1035; parent-identified as 67% Black and 25% Hispanic) to identify rare variants (minor allele frequency < 0.01). We assigned variants to genes and tested for associations using an omnibus variant-set test between each of 24,902 genes and 8 asthma-associated quantitative traits. On combining our results with external data on predicted gene expression in humans and mouse knockout studies, we identified 3 candidate genes. A burden of rare variants in each gene and in a combined 3-gene score was tested for its associations with clinical phenotypes of asthma. Finally, published single-cell gene expression data in lower airway mucosal cells after allergen challenge were used to assess transcriptional responses to allergen. Rare variants in USF1 were significantly associated with blood neutrophil count (P = 2.18 × 10−7); rare variants in TNFRSF21 with total IgE (P = 6.47 × 10−6) and PIK3R6 with eosinophil count (P = 4.10 × 10−5) reached suggestive significance. These 3 findings were supported by independent data from human and mouse studies. A burden of rare variants in TNFRSF21 and in a 3-gene score was associated with allergy-related phenotypes in cohorts of children with mild and severe asthma. Furthermore, TNFRSF21 was significantly upregulated in bronchial basal epithelial cells from adults with allergic asthma but not in adults with allergies (but not asthma) after allergen challenge. We report novel associations between rare variants in genes and allergic and inflammatory phenotypes in children with diverse ancestries, highlighting TNFRSF21 as contributing to the development of allergic asthma.