The Ras/Raf/MEK/ERK signaling pathway plays a key role in physiological processes and is often dysregulated in cancer as well as developmental disorders such as the neuro-cardio-facio-cutaneous syndromes. Raf proteins, and in particular B-Raf, represent an important regulatory node, which is reflected by the fact that B-Raf represents the most frequently mutated protein kinase gene in human tumors. Many genetic aberrations of the BRAF proto-oncogene, such as different point mutations and chromosomal rearrangements, have been reported since 2002. As B-Raf displays aberrant activity in tumor entities for which no or only limited effective therapies are available, e.g., melanoma, ovarian, and colorectal carcinoma, a lot of hope and effort has been placed on strategies inhibiting its activity. Indeed, recent clinical trials involving B-Raf selective inhibitors exhibited unprecedented response rates in metastatic melanoma patients. However, this therapeutic response is short-lived due to the emergence of several resistance mechanisms. Here we provide a review of our current knowledge on the regulation of this kinase under physiological circumstances and how this control is lost by mutations. We give an update on malignancies displaying high frequencies of BRAF mutations and discuss the mechanisms underlying the side effects and drug resistance phenomena associated with Raf inhibitors.