Tagraxofusp is a first‐in‐class CD123‐directed conjugate of an amended diphtheria toxin platform and recombinant interleukin 3. Binding and subsequent internalization of the drug result in cell death via disruption of intracellular protein synthesis. CD123 is a surface marker that is expressed in several hematological malignancies, especially blastic plasmacytoid dendritic cell neoplasm (BPDCN), where its expression is ubiquitous. A pivotal study of tagraxofusp in BPDCN resulted in its approval for the treatment of BPDCN, the first treatment approved for this indication. Since the introduction of tagraxofusp, research has focused on the management of adverse effects, combination therapy to improve outcomes in fit patients, and dosing and combination strategies to mitigate toxicities while preserving efficacy, especially among older patients. The successful targeting of CD123 in BPDCN has also encouraged research into a variety of other CD123‐positive hematological neoplasms, including acute myeloid leukemia (AML), and informed the development of other novel agents targeting CD123. This review examines the clinical data leading to the development and approval of tagraxofusp in BPDCN, how it is being used in combination to improve outcomes in BPDCN and AML, and its developing role in other hematological malignancies.