Molecular imaging can allow the non-invasive assessment of biological and biochemical processes in living subjects. Such technologies therefore have the potential to enhance our understanding of disease and drug activity during preclinical and clinical drug development, which could aid decisions to select candidates that seem most likely to be successful or to halt the development of drugs that seem likely to ultimately fail. Here, with an emphasis on oncology, we review the applications of molecular imaging in drug development, highlighting successes and identifying key challenges that need to be addressed for successful integration of molecular imaging into the drug development process.