The absolute benefit of a treatment varies between individuals depending on their prognosis before treatment and whether their response to the treatment varies from the overall relative risk reduction measured in clinical trials. Based on these principles, biomarkers that can provide information about an individual's prognosis or predict his or her treatment response can be used to tailor treatment decisions to individual patients. Many novel molecular biomarkers are currently available. Although there is evidence to show that some of these can improve patient outcomes through improved biomarker-guided treatment strategies, others are yet to be adequately evaluated. Randomised controlled trials (RCTs) can distinguish whether a biomarker provides prognostic or predictive information and assess whether using a biomarker to guide treatment improves patient outcomes. Targeted RCTs can be used to demonstrate the efficacy of treatment in a restricted biomarker-defined population, and non-targeted RCTs can compare biomarker-guided versus conventional test-guided treatment strategies in broader populations.