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The development of pharmacodynamic (PD) biomarkers in oncology has implications for design of clinical protocols from preclinical data and for predicting clinical outcomes from early clinical data. Two classes of biomarkers have received particular attention. Phosphoproteins in biopsy samples are markers of inhibition of signalling pathways, target sites for many novel agents. Biomarkers of apoptosis in plasma can measure tumour cell killing by drugs in phase I clinical trials. The predictive power of PD biomarkers is enhanced by data modelling. With pharmacokinetic models, PD models form PK/PD models that predict the time course both of drug concentration and drug effects. If biomarkers of drug toxicity are also measured, the models can predict drug selectivity as well as efficacy. PK/PD models, in conjunction with disease models, make possible virtual clinical trials, in which multiple trial designs are assessed in silico, so the optimal trial design can be selected for experimental evaluation.