Naturally occurring human genetic variants predicted to inactivate protein-coding genes provide an in vivo model of human gene inactivation that complements cell and model organism knockout studies. Here we report three key findings regarding assessment of candidate drug targets using human loss-of-function variants. First, even essential genes, where loss-of-function variants are not tolerated, can be highly successful as targets of inhibitory drugs. Second, in most genes, loss-of-function variants are sufficiently rare that genotype-based ascertainment of homozygous or compound heterozygous “knockout” humans will await sample sizes ~1,000 times those presently available, unless recruitment focuses on consanguineous individuals. Third, automated variant annotation and filtering are powerful, but manual curation remains critical for removing artifacts, and is a prerequisite for recall-by-genotype efforts. Our results provide a roadmap for human “knockout” studies and should guide interpretation of loss-of-function variants in drug development.