The technological revolution in imaging during recent decades has transformed the way image-guided radiation therapy is performed. Anatomical imaging (plain radiography, computed tomography, magnetic resonance imaging) greatly improved the accuracy of delineating target structures and has formed the foundation of 3D-based radiation treatment. However, the treatment planning paradigm in radiation oncology is beginning to shift toward a more biological and molecular approach as advances in biochemistry, molecular biology, and technology have made functional imaging (positron emission tomography, nuclear magnetic resonance spectroscopy, optical imaging) of physiological processes in tumors more feasible and practical. This review provides an overview of the role of current imaging strategies in radiation oncology, with a focus on functional imaging modalities, as it relates to staging and molecular profiling (cellular proliferation, apoptosis, angiogenesis, hypoxia, receptor status) of tumors, defining radiation target volumes, and assessing therapeutic response. In addition, obstacles such as imaging-pathological validation, optimal timing of post-therapy scans, spatial and temporal evolution of tumors, and lack of clinical outcome studies are discussed that must be overcome before a new era of functional imaging-guided therapy becomes a clinical reality.