Significant advances have been made in our understanding of the natural history, pathogenesis, mechanisms of progression and prognosis of monoclonal gammopathy of undetermined significance (MGUS). Although the overall incidence of MGUS progression is 1 per year, it is now possible to more accurately predict the risk of progression based on a new risk-stratification model. However, it is still hard to design chemopreventive trials given that the absolute risk of progression per year is low, even in the high-risk group. Therefore, further improvements in estimating the risk of progression are needed. Roughly 50% of MGUS may originate from primary translocation events at the heavy-chain immunoglobulin locus at chromosome 14q32. In most of the remaining MGUS patients, the initiating event is associated with genomic instability that results in hyperdiploidy of certain odd numbered chromosomes. Cytogenetically distinct subtypes of MGUS may carry significant differences in the risk of progression to malignancy. New markers, such as measures of bone marrow angiogenesis and circulating plasma cells may be additional prognostic factors. A better understanding of the mechanisms underlying the transition of normal plasma cells to the MGUS phenotype, and the transition of MGUS to myeloma or related malignancy, will help identify new risk factors for progression and new targets for chemopreventive interventions.