Discoveries of adaptive gene knockouts and widespread losses of complete genes have in recent years led to a major rethink of the early view that loss-of-function alleles are almost always deleterious. Today, surveys of population genomic diversity are revealing extensive loss-of-function and gene content variation, yet the adaptive significance of much of this variation remains unknown. Here we examine the evolutionary dynamics of adaptive loss of function through the lens of population genomics and consider the challenges and opportunities of studying adaptive loss-of-function alleles using population genetics models. We discuss how the theoretically expected existence of allelic heterogeneity, defined as multiple functionally analogous mutations at the same locus, has proven consistent with empirical evidence and why this impedes both the detection of selection and causal relationships with phenotypes. We then review technical progress towards new functionally explicit population genomic tools and genotype-phenotype methods to overcome these limitations. More broadly, we discuss how the challenges of studying adaptive loss of function highlight the value of classifying genomic variation in a way consistent with the functional concept of an allele from classical population genetics.