Many of the initial examples of the clinical utility of pharmacogenetics were elucidated in the field of oncology. Those examples were largely based on the existence of germline genetic variation that influences the metabolism of cytotoxic drugs. However, with the development of kinase inhibitors, drugs designed to preferentially target altered proteins driving oncogenesis, pharmacogenetics in cancer has shifted to understanding the somatic differences that determine response to these targeted agents. It is becoming increasingly clear that understanding the molecular genetics of cancer will lead to the further development of targeted therapeutics. Therefore, it is imperative that pharmacogenomics researchers understand the motivations and challenges of developing targeted therapies to treat cancer as a paradigm for personalized medicine. However, much of the discussion in the pharmacogenomics community in cancer is still largely focused on the germline variants as predictors of drug toxicity. In light of that fact, this review presents a detailed discussion of the development of commonly used targeted therapies for the treatment of hematological and solid tumors, the somatic mutations that determine response to those therapies, and the mechanisms of drug resistance.