Abstract There has been remarkable progress in our understanding of plasma cell dyscrasias and leukemias in recent years. New prognostic factors have come to light. Del(1)(p12) and t(4;14) confer poor prognoses on patients with myeloma. COX-2 positivity is associated with poorer progression-free and overall survival in myeloma patients and a role for COX-2 inhibitors in myeloma has been suggested. Thalidomide (400 mg/day) and dexamethasone (20 mg/m2 daily for 4 days) has emerged as first-line treatment for myelomas. Serious toxicities have been recognized, however. The thalidomide derivative, lenalidomide may be more active and less toxic than the parent compound and may replace it. Lenolidomide is also highly active against 5q-syndrome. Bortezomib is at least as active as thalidomide and less toxic, and the two drugs are not cross-resistant. Although marrow transplantation was the standard of care for newly diagnosed myeloma patients, recent prospective randomized studies cast doubt on its role. ZAP-70 and CD38 expression have major prognostic impact on outcome of chronic lymphocytic leukemia (CLL). The former may be a stronger predictor of the need for treatment than the presence of an unmutated IgV(H) gene. Although fludarabine is highly active in CLL, it may be associated with a higher number of second malignancies than are other treatments. Rituximab has major activity against CLL. However, at standard dose its effectiveness is limited by the fact that CD20 density is relatively low on CLL cells and circulating CD20 binds a significant fraction of administered drug. Either combining rituximab with other agents, or giving it in mega doses, which are safe and highly effective, can overcome these impediments. Imatinib has revolutionized the treatment of chronic phase chronic myelocytic leukemia (CML) and markedly decreased the number of allogeneic bone marrow transplants done for this neoplasm. However, the development of rapid resistance to the agent in blast crisis of CML or Philadelphia chromosome-positive acute lymphocytic leukemia gives the agent only a minor role in those diseases. More effective tyrosine kinase inhibitors currently under development may prove to be more useful in acute leukemias with the Philadelphia chromosome. Clofarabine is a successful new drug for acute myeloid leukemias of childhood and juvenile myelomonocytic leukemia. Drugs such as gemtuzumab ozogamicin, FLT3 inhibitors and farnesyl transferase inhibitors have been disappointing in acute leukemia. Histone deacetylase inhibition, especially in combination with proteasome inhibition, may be effective acute leukemia treatment.