The challenges of early cancer drug development have increased in complexity over time. Previously, drugs were nonselective cytotoxics with simple administration, but now drugs are molecularly targeted with more complex schedules and trials. Phase 1 studies of targeted agents require consideration of optimal dose, schedules, patient selection based on biomarkers, and incorporation of pharmacokinetic/pharmacodynamic analyses. Phase 2 studies increasingly involve randomized designs, combination treatments, biomarker analyses, and collection of tumor samples. Managing this complexity requires thorough preclinical data, early companion diagnostic and biomarker assay development, predefined go/no-go criteria, and clinical development plans to guide subsequent studies.