To evaluate the diagnostic utility of publicly funded clinical exome sequencing (ES) for patients with suspected rare genetic diseases. We prospectively enrolled 297 probands who met eligibility criteria and received ES across 5 sites in Ontario, Canada, and extracted data from medical records and clinician surveys. Using the Fryback and Thornbury Efficacy Framework, we assessed diagnostic accuracy by examining laboratory interpretation of results and assessed diagnostic thinking by examining the clinical interpretation of results and whether clinical-molecular diagnoses would have been achieved via alternative hypothetical molecular tests. Laboratories reported 105 molecular diagnoses and 165 uncertain results in known and novel genes. Of these, clinicians interpreted 102 of 105 (97%) molecular diagnoses and 6 of 165 (4%) uncertain results as clinical-molecular diagnoses. The 108 clinical-molecular diagnoses were in 104 families (35% diagnostic yield). Each eligibility criteria resulted in diagnostic yields of 30% to 40%, and higher yields were achieved when >2 eligibility criteria were met (up to 45%). Hypothetical tests would have identified 61% of clinical-molecular diagnoses. We demonstrate robustness in eligibility criteria and high clinical validity of laboratory results from ES testing. The importance of ES was highlighted by the potential 40% of patients that would have gone undiagnosed without this test.