The molecular analysis of genetic alterations in acute lymphoblastic leukemia has led to the development of molecular diagnostic techniques that have improved the biologic characterization of newly diagnosed patients. Modern treatment protocols rely on this information to tailor the intensity of therapy to the risk of relapse. For example, the TEL-AML1 fusion, the most common genetic abnormality in childhood acute lymphoblastic leukemia, was recently shown to be an independent, favorable prognostic factor, suggesting that patients with this abnormality are best treated with conventional antimetabolite-based therapy. Extremely high-risk patients, such as those with MLL gene rearrangements, are now considered candidates for alternative treatments, such as allogeneic bone marrow transplantation in first remission. Efforts are currently being made to reduce the long-term sequelae of therapy and to use molecular techniques to monitor minimal residual disease.