A key part of drug discovery and development is the characterization and optimization of the safety and efficacy of drug candidates to identify those that have an appropriately balanced safety-efficacy profile for a given indication. The therapeutic index (TI)--which is typically considered as the ratio of the highest exposure to the drug that results in no toxicity to the exposure that produces the desired efficacy--is an important parameter in efforts to achieve this balance. Various types of safety and efficacy data are generated in vitro and in vivo (in animals and in humans), and these data can be used to predict the clinical TI of a drug candidate at an early stage. However, approaches to systematically and quantitatively compare these types of data and to apply this knowledge more effectively are needed. This article critically discusses the various aspects of TI determination and interpretation in drug development for both small molecule drugs and biotherapeutics.