Erlotinib, a small-molecule tyrosine kinase inhibitor targeted against the EGF receptor, has demonstrated survival benefit as a single agent in advanced non-small-cell lung cancer and in pancreatic cancer in combination with gemcitabine. Erlotinib has been studied extensively as a single agent as well as in combination with chemotherapy, radiation and other targeted agents. Despite its distinct target, biomarkers for selecting patients most likely to benefit from therapy are still under investigation. While EGF receptor mutations are present in approximately 10% of North American patients, that alone does not explain the benefit observed in patients with advanced non-small-cell lung cancer. With the therapeutic landscape becoming more crowded and challenging, the role of biomarkers to individualize therapy for patients is becoming increasingly more important. We summarize the current database of knowledge with regard to erlotinib pharmacology, clinical efficacy, toxicity and biomarkers.