Pharmacogenetics and pharmacogenomics deal with the genetic basis underlying variable drug response in individual patients. The traditional pharmacogenetic approach relies on studying sequence variations in candidate genes suspected of affecting drug response. On the other hand, pharmacogenomic studies encompass the sum of all genes, i.e., the genome. Numerous genes may play a role in drug response and toxicity, introducing a daunting level of complexity into the search for candidate genes. The high speed and specificity associated with newly emerging genomic technologies enable the search for relevant genes and their variants to include the entire genome. These new technologies have essentially spawned a new discipline, termed pharmacogenomics, which seeks to identify the variant genes affecting the response to drugs in individual patients. Moreover, pharmacogenomic analysis can identify disease susceptibility genes representing potential new drug targets. All of this will lead to novel approaches in drug discovery, an individualized application of drug therapy, and new insights into disease prevention. Current concepts in drug therapy often attempt treatment of large patient populations as groups, irrespective of the potential for individual, genetically-based differences in drug response. In contrast, pharmacogenomics may help focus effective therapy on smaller patient subpopulations which although demonstrating the same disease phenotype are characterized by distinct genetic profiles. Whether and to what extent this individual, genetics-based approach to medicine results in improved, economically feasible therapy remain to be seen. To exploit these opportunities in genetic medicine, novel technologies will be needed, legal and ethical questions must be clarified, health care professionals must be educated, and the public must be informed about the implications of genetic testing in drug therapy and disease management.