ABSTRACTIn conventional subgroup analyses, subgroup treatment effects are estimated using data from each subgroup separately without considering data from other subgroups in the same study. The subgroup treatment effects estimated this way may be heterogenous with high variability due to small sample sizes in some subgroups and much different from the treatment effect in the overall population. A Bayesian hierarchical model (BHM) can be used to derive more precise, and less heterogenous estimates of subgroup treatment effects that are closer to the treatment effect in the overall population. BHM assumes exchangeability in treatment effect across subgroups after adjusting for effect modifiers and other relevant covariates. In this article, we will discuss the technical details for applying one‐way and multi‐way BHM using summary‐level statistics, and patient‐level data for subgroup analysis. Four case studies based on four new drug applications are used to illustrate the application of these models in subgroup analyses for continuous, dichotomous, time‐to‐event, and count endpoints.