Genome sequencing can identify individuals in the general population who harbor rare coding variants in genes for Mendelian disorders and who may consequently have increased disease risk. Previous studies of rare variants in phenotypically extreme individuals display ascertainment bias and may demonstrate inflated effect-size estimates. We sequenced seven genes for maturity-onset diabetes of the young (MODY) in well-phenotyped population samples (n = 4,003). We filtered rare variants according to two prediction criteria for disease-causing mutations: reported previously in MODY or satisfying stringent de novo thresholds (rare, conserved and protein damaging). Approximately 1.5% and 0.5% of randomly selected individuals from the Framingham and Jackson Heart Studies, respectively, carry variants from these two classes. However, the vast majority of carriers remain euglycemic through middle age. Accurate estimates of variant effect sizes from population-based sequencing are needed to avoid falsely predicting a substantial fraction of individuals as being at risk for MODY or other Mendelian diseases.