While acute myeloid leukemia (AML) is significantly less common than acute lymphoblastic leukemia (ALL) in childhood, it is significantly more deadly with only half as many children likely to be cured with standard therapy. In addition, the typical treatment for AML is among the most toxic of treatments for pediatric cancer; it includes intensive multiagent chemotherapy and, often, hematopoietic stem cell transplantation. Given the poor prognosis of pediatric AML and the significant toxicity of standard AML therapy, novel therapies are needed. Improved understanding of the molecular and cellular biology of leukemia has facilitated the development of molecularly targeted therapies. In this article, we review progress to date with agents that are showing promise in the treatment of pediatric AML including targeted immunoconjugates, inhibitors of signaling molecules (e.g. FMS-like tyrosine kinase 3 [FLT3], farnesyltransferase, and mammalian target of rapamycin [mTOR]), agents that target epigenetic regulation of gene expression (DNA methyltransferase inhibitors and histone deacetylase inhibitors), and proteasome inhibitors. For the specific agents in each of these classes, we summarize the published preclinical data and the clinical trials that have been completed, are in progress, or are being planned for children with AML. Finally, we discuss potential challenges to the success of molecularly targeted therapy including demonstrating adequate targeting of leukemia stem cells, developing synergistic and tolerable combinations of agents, and designing adequately powered clinical trials to test efficacy in molecularly defined subsets of patients.