Recent advances in molecular genetics have increased knowledge regarding the mechanisms leading to myelodysplastic syndrome (MDS), secondary acute myeloid leukemia (AML), and therapy-induced MDS. Many genetic defects underlying MDS and AML have been identified thereby allowing the development of new molecular-targeted therapies. Several new classes of drugs have shown promise in early clinical trials and may probably alter the standard of care of these patients in the near future. Among these new drugs are farnesyltransferase inhibitors and receptor tyrosine kinase inhibitors including FLT3 and VEGF inhibitors. These agents have been tested in patients with solid tumors and hematologic malignancies such as AML and MDS. Most of the studies in MDS are still in early stages of development. The DNA hypomethylating compounds azacytidine and decitabine may reduce hypermethylation and induce re-expression of key tumor suppressor genes in MDS. Biochemical compounds with histone deacetylase inhibitory activity, such as valproic acid (VPA), have been tested as antineoplastic agents. Finally, new vaccination strategies are developing in MDS patients based on the identification of MDS-associated antigens. Future therapies will attempt to resolve cytopenias in MDS, eliminate malignant clones, and allow differentiation by attacking specific mechanisms of the disease.