AbstractLong-read HiFi genome sequencing (GS) allows for accurate detection and direct phasing of single nucleotide variants (SNV), indels, and structural variants (SV). Recent algorithmic development enables simultaneous detection of CpG methylation (mCpG) for analysis of regulatory element (RE) activity directly in HiFi-GS. We generated a comprehensive haplotype-resolved HiFi-GS dataset from a rare disease cohort of 276 samples in 152 families to identify rare (∼0.5%) hyper-mCpG events. We found that 80% of these events are allele-specific and predicted to cause loss of RE (LRE). We demonstrated heritability of extreme hyper-mCpG including rarecisSNVs and SVs causing short (∼200bp) and large hyper-mCpG events (>1 kb), respectively. We identified novel repeat expansions in proximal promoters predicting allelic gene silencing via hyper-mCpG and demonstrated allelic transcriptional events downstream. On average 30-40 LREs overlapped rare disease genes per patient, providing indications for variation prioritization. LRE led to a previously undiagnosed pathogenic allele inDIP2Bcausing global developmental delay. We propose that use of HiFi-GS in unsolved rare disease cases will allow detection of unconventional diseases alleles due to LRE.