Biomarkers are defined as anatomic, physiologic, biochemical, molecular, or genetic parameters associated with the presence, absence, or severity of a disease process. As such, biomarkers may be useful as prognostic and diagnostic tests. Establishing the utility of a given biomarker as a prognostic or diagnostic test requires the conduct of carefully designed cohort studies in which the biomarker and the outcome of interest are measured independently. The design and analysis of such studies is discussed. Surrogate outcomes in clinical trials consist of events or biomarkers intended to reflect important clinical outcomes. Surrogate outcomes may offer advantages in providing statistically robust estimates of treatment effects with smaller sample sizes. However, to be useful, surrogate outcomes have to be validated to ensure that the effect of therapy on them truly reflects the effect of therapy on the important clinical outcomes of interest.