The use of biomarkers to identify patients who can benefit from treatment with a specific anticancer agent has the potential to both improve patient care and accelerate drug development. The development of targeted agents and their accompanying biomarkers frequently occurs contemporaneously, and confidence in a putative biomarker's performance might, therefore, be insufficient to restrict the definitive testing of a new agent to the subgroup of biomarker-positive patients. This Review considers which clinical trial designs and analysis strategies are appropriate for use in phase III, biomarker-driven, randomized clinical trials, on the basis of pre-existing evidence that the biomarker can successfully identify patients who will respond to the treatment in question. The types of interim monitoring that are appropriate for these trials are also discussed. In addition, enrichment strategies based on the use of prognostic biomarkers to separate a population into subgroups with better and worse outcomes, regardless of treatment, are described. Finally, the possibility of formally using a biomarker during phase II drug development, to select what type of biomarker-driven strategy should be used in the phase III trial, is discussed.