The ability to sequence the DNA of an organism has become one of the most important tools in modern biological research. Until recently, the sequencing of even small model genomes required substantial funds and international collaboration. The development of second-generation sequencing technology has increased the throughput and reduced the cost of sequence generation by several orders of magnitude. These new methods produce vast numbers of relatively short reads, usually at the expense of read accuracy. Since the first commercial second-generation sequencing system was produced by 454 Technologies and commercialised by Roche, several other companies including Illumina, Applied Biosystems, Helicos Biosciences and Pacific Biosciences have joined the competition. Because of the relatively high error rate and lack of assembly tools, short-read sequence technology has mainly been applied to the re-sequencing of genomes. However, some recent applications have focused on the de novo assembly of these data. De novo assembly remains the greatest challenge for DNA sequencing and there are specific problems for second generation sequencing which produces short reads with a high error rate. However, a number of different approaches for short-read assembly have been proposed and some have been implemented in working software. In this review, we compare the current approaches for second-generation genome sequencing, explore the future direction of this technology and the implications for plant genome research.