Resistance to chemotherapy limits the effectiveness of anti-cancer drug treatment. Tumours may be intrinsically drug-resistant or develop resistance to chemotherapy during treatment. Acquired resistance is a particular problem, as tumours not only become resistant to the drugs originally used to treat them, but may also become cross-resistant to other drugs with different mechanisms of action. Resistance to chemotherapy is believed to cause treatment failure in over 90% of patients with metastatic cancer, and resistant micrometastic tumour cells may also reduce the effectiveness of chemotherapy in the adjuvant setting. Clearly, if drug resistance could be overcome, the impact on survival would be highly significant. This review focuses on molecular mechanisms of drug resistance that operate to reduce drug sensitivity in cancer cells. Drug resistance can occur at many levels, including increased drug efflux, drug inactivation, alterations in drug target, processing of drug-induced damage, and evasion of apoptosis. Advances in DNA microarray and proteomic technology, and the ongoing development of new targeted therapies have opened up new opportunities to combat drug resistance. We are now able to characterize the signalling pathways involved in regulating tumour cell response to chemotherapy more completely than ever before. This will facilitate the future development of rational combined chemotherapy regimens, in which the newer targeted therapies are used in combination with cytotoxic drugs to enhance chemotherapy activity. The ability to predict response to chemotherapy and to modulate this response with targeted therapies will permit selection of the best treatment for individual patients. Copyright © 2005 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.