Because most medicines have not been encountered by individuals of our species prior to treatment, it follows that treatment could uncover a previously silent genetic predisposition or could interact with a known genetic variation(s) to produce an unintended outcome. Pharmacogenetics encompasses the discovery, testing, and application of genetic variation as applied to therapeutic treatment and outcome. Two broad divisions of pharmacogenetics are recognized: pharmacokinetics, which describes genetic variations that affect drug metabolism, and pharmacodynamics which describes similar processes that have effects on drug targets, including downstream signaling pathways. The genetic mechanisms that underlie an altered drug response recapitulates most known sources of genomic variation. The most commonly encountered is sequence variation. This includes changes in the primary nucleotide sequence of coding, regulatory, and splice regions of a gene, the product of which affects, or is affected by, a drug. Less common forms of variability in the structure and function of the genome have also been found to underlie an individualized response to medicines. Among these are sequence variation in microRNA (miRNA) binding sites, which affects the ability of miRNA to regulate translation; pharmacoepigenetics, which examines heritable chromatin modifications; and copy number variation. Among the 158 currently registered pharmacogenetic clinical trials, the most frequent conditions or disease processes being studied are cancer, psychiatric disorders, and coagulation/ thrombosis. From this observation, it is postulated that pharmacogenetics has its greatest potential for optimizing the use of drugs with a high rate of failure or adverse outcomes.