Progress in understanding the genetic components of human diseases has been bolstered by next-generation targeted sequencing technologies. Emerging techniques that promise to improve throughput, cost and turnaround time include molecular inversion probe (MIP)-based methods, which enable rapid and simple workflows to detect sequence variation in inherited disease and cancer. We have developed a streamlined HEAT-Seq targeted enrichment assay, for variant discovery and validation. It utilizes advanced versions of MIPs with unique molecular identifiers incorporated into probes to identify PCR duplicates, improve sensitivity, and reduce false-positive calls. Previous studies using MIPs failed to address a key barrier to the widespread adoption of this technology, e.g., the difficulty of designing probes and probe-sets that yield uniform sequence coverage over the target.  We addressed this issue by developing an empirical database-driven approach. All of the probes in the database have been assigned empirically derived performance scores. Consideration of individual probe performance in the design process allows generation of custom probe sets which typically produce more uniform coverage relative to previous methods. The efficiency of our approach was validated using three HEAT-Seq gene panels targeting cancer and inherited disease. Our analyses indicate improved performance compared to previous methods for two important metrics: (1) percentage of functional probes in the initial probe-set, and (2) sensitivity of SNP detection. The data suggest HEAT-Seq target enrichment system is an efficient, sensitive and cost-effective tool for targeted sequencing. To demonstrate the efficacy of HEAT-Seq target enrichment assay for identifying genetic variants in Mendelian disease, we studied two trios segregating rare autosomal recessive neurological disorders: Ataxia Telangiectasia (AT) and Familial Dysautonomia (FD). The AT mutation is a G>A coding mutation in exon 55 of ATM. The FD mutation is a T>C transition in a splice acceptor of IKBKAP. The mutations in both trios were previously described. We characterized the samples using both a large gene HEAT-Seq discovery panel that included ATM and IKBKAP, and a small validation panel that targeted only ATM and IKBKAP. The results show HEAT-Seq target enrichment system is a fast and cost-effective assay for identifying genetic variation for both discovery and genotyping/validation applications in Mendelian disease.