The oxazaphosphorines cyclophosphamide, ifosfamide and trofosfamide remain a clinically useful class of anticancer drugs with substantial antitumour activity against a variety of solid tumors and hematological malignancies. A major limitation to their use is tumour resistance, which is due to multiple mechanisms that include increased DNA repair, increased cellular thiol levels, glutathione S-transferase and aldehyde dehydrogenase activities, and altered cell-death response to DNA damage. These mechanisms have been recently re-examined with the aid of sensitive analytical techniques, high-throughput proteomic and genomic approaches, and powerful pharmacogenetic tools. Oxazaphosphorine resistance, together with dose-limiting toxicity (mainly neutropenia and neurotoxicity), significantly hinders chemotherapy in patients, and hence, there is compelling need to find ways to overcome it. Four major approaches are currently being explored in preclinical models, some also in patients: combination with agents that modulate cellular response and disposition of oxazaphosphorines; antisense oligonucleotides directed against specific target genes; introduction of an activating gene (CYP3A4) into tumor tissue; and modification of dosing regimens. Of these approaches, antisense oligonucleotides and gene therapy are perhaps more speculative, requiring detailed safety and efficacy studies in preclinical models and in patients. A fifth approach is the design of novel oxazaphosphorines that have favourable pharmacokinetic and pharmacodynamic properties and are less vulnerable to resistance. Oxazaphosphorines not requiring hepatic CYP-mediated activation (for example, NSC 613060 and mafosfamide) or having additional targets (for example, glufosfamide that also targets glucose transport) have been synthesized and are being evaluated for safety and efficacy. Characterization of the molecular targets associated with oxazaphosphorine resistance may lead to a deeper understanding of the factors critical to the optimal use of these agents in chemotherapy and may allow the development of strategies to overcome resistance.