An increased understanding of the molecular etiology of cancer has enabled the development of novel therapies that are collectively referred to as molecular targeted agents. Unlike the drugs used in conventional chemotherapy, these agents are designed to specifically interfere with key molecular events that are responsible for the malignant phenotype. They hold great promise for widening the therapeutic window, which would provide more effective treatment options as compared with cytotoxic therapies. In addition, the targeted approach that is characteristic of these drugs provides unique opportunities for combination therapies with other anticancer agents that have non-overlapping toxicities. Targeted agents are therefore primed to become invaluable therapeutic tools in the multimodal treatment of cancer. The challenges associated with these novel targeted therapies are distinct from those faced in conventional chemotherapy. These unique challenges include the need to select appropriate pharmacodynamic markers to guide dose and schedule and to identify biomarkers that enable selection of patient populations that are most likely to benefit from the treatment. In addition, although the emergence of resistance to targeted therapies is a problem frequently faced in the clinic, the molecular characterization of resistance mechanisms provides the opportunity to design second-generation therapies or combination therapies aimed at preventing resistance or restoring response. The development of the tyrosine kinase inhibitor imatinib has revolutionized the treatment of chronic myeloid leukemia (CML). In this article, we discuss the lessons learned from the application of imatinib and other targeted agents in clinical practice and discuss how these insights may guide the development of novel targeted therapies.