In addition to being present in tumor cells, many targets of signal transduction inhibitors are also found in normal tissue. Side effects attributable to the mechanism of action of molecular targeted agents thus represent "on-target" modulation in normal tissues. These mechanism-based toxicities can be pharmacodynamic effects of pathway inhibition and, in tumors depending on the inhibited pathway for proliferation, might be biomarkers of efficacy. The development of rash with tyrosine kinase inhibitors or monoclonal antibodies targeting the epidermal growth factor receptor is associated with superior outcomes in lung, head and neck, colorectal, and pancreatic cancer studies. Correlated with superior efficacy in retrospective analyses of large studies in advanced colorectal, breast, and renal cell carcinoma, arterial hypertension as an adverse event of antiangiogenic agents may also be a marker of effective target inhibition. An association between hypothyroidism and the activity of multitargeted tyrosine kinase inhibitors has been identified in renal cell carcinoma patients. Tumor growth addiction to the specific pathway that is effectively targeted may be the link between a mechanism-based toxicity and efficacy. The biological basis for this correlation can be pharmacological, with higher drug exposure being associated with greater toxicity and antitumor activity, and can also be genetic, because single nucleotide polymorphisms play an important role in drug pharmacokinetic and pharmacodynamic processes. Investigators have proposed that interpatient differences and associated toxicities can be exploited for dose selection and titration, and clinical trials are currently exploring intrapatient "dosing-to-toxicity" strategies. Ultimately, the predictive value of a side effect of molecular targeted therapies requires validation in prospective trials.