Intensive use of cytotoxic agents in multimodality therapeutic regimens has resulted in almost 80% five-year disease-free survival and cure in the majority of childhood cancer patients. However, such success has come at the expense of severe acute or delayed toxicities and an increased occurrence of secondary cancers. With an increasing understanding of the genetic changes that underlie transformation in childhood cancer, rational approaches using agents that target these transforming events are being developed. Current and future strategies in developing tumor-selective therapy using inhibitors of signaling pathways dysregulated in leukemias (FLT3, NOTCH1) and solid/brain tumors (ErbB1-4, IGF-IR, PTCH1), and the challenges in developing less toxic, but equally effective treatments in pediatric oncology are presented.