The current prognosis of newly diagnosed children with acute lymphoblastic leukemia (ALL) and acute myeloid leukemia (AML) is much more favorable than that of children diagnosed 20 to 50 years ago. However, still 15–20% of patients with ALL and 40–50% of patients with AML are not cured with contemporary multiagent treatment protocols and stem cell transplantation. The response to treatment is determined by both the pharmacokinetics of drugs and the cellular responsiveness to drugs. The cellular response to drugs clearly differs between leukemic cells of the lymphoid and myeloid lineage and among genetic subtypes of ALL and AML. We review here the knowledge about the biology of cellular resistance and sensitivity to drugs among various genetic subtypes of pediatric ALL and AML. Prognostic value of cellular drug resistance Short-term culture in vitro assays of drug cytotoxicity, such as the differential staining of cytotoxicity, fluorometric microculture cytotoxicity assay, and methylthiazol–tetrazolium-based assays are often used to test the in vitro response of patients' leukemic cells to drugs (sometimes also referred to as “ex vivo” tests). Several groups showed independently that children with in vitro resistant ALL cells at initial diagnosis have a poorer clinical outcome than those with in vitro sensitive leukemia. The most discriminative prognostic value is observed for in vitro resistance to glucocorticoids (prednisolone) in newly diagnosed children with ALL; the 5-year probability of disease-free survival was 40% in patients with >1500-fold increase in resistance to prednisolone and >80% in those with sensitive leukemia. Also clinically poor responders to a therapeutic window with systemically administered prednisone and one dose of intrathecal methotrexate have leukemia that is more resistant to prednisolone in vitro. Furthermore, amongst good window responders, in vitro prednisolone resistance predicts an unfavorable long-term clinical outcome. A similar association between in vitro (cellular) resistance or poor clinical window response and unfavorable long-term clinical outcome has been found for l-asparaginase.