Multiple myeloma (MM) is a B-cell neoplasm characterized by infiltration of the bone marrow with malignant plasma cells, synthesizing and secreting monoclonal immunoglobulin fragments. The malignant transformation of this terminally differentiated plasma cell is the result of a multistep transformation process. In spite of recent advances in this field, the cause and the exact molecular genetic basis of MM remain obscure. In this review, an attempt has been made to summarize the genetic alterations having functional significance in the generation and progression of MM, and also the existing relationship between genetic abnormalities and chemosensitivity, as well as the typical genetic alterations in various MM subgroups. Factors known to have a role in the conversion of monoclonal gammopathy of unknown significance (MGUS) to MM are also reviewed.