Theranostics is a  targeted treatment strategy that combines therapeutics with diagnostics. It associates both a diagnostic test that identifies patients most likely to be helped or harmed by a new medication, and targeted drug therapy based on the test results. Bioinformatics, genomics, proteomics, and functional genomics are molecular biology tools essential for the progress of molecular theranostics. These tools generate the genetic and protein information required for the development of diagnostic assays. Theranostics includes a wide range of subjects, including personalized medicine, pharmacogenomics, and molecular imaging to develop efficient new targeted therapies with adequate benefit/risk to patients and a better molecular understanding of how to optimize drug selection. Furthermore, theranostics aims to monitor the response to the treatment, to increase drug efficacy and safety. In addition, theranostics could eliminate the unnecessary treatment of patients for whom therapy is not appropriate, resulting in significant drug cost savings for the healthcare system. However, the introduction of theranostic tests into routine health care requires both a demonstration of cost-effectiveness and the availability of appropriate accessible testing systems. This review reports validation studies in oncology and infectious diseases that have demonstrated the benefits of such approach in well-defined subpopulations of patients, moving the field from the drug development process toward clinical practice and routine application. Theranostics may change the usual business model of pharmaceutical companies from the classic blockbuster model toward targeted therapies.