We currently rely on large randomized controlled trials and meta-analyses to make clinical decisions; this places us at a risk of discarding subgroup or individually specific treatment options owing to their failure to prove efficacious across entire populations. There is a new era emerging in personalized medicine that will focus on individual differences that are not evident phenomenologically. Much research is directed towards identifying genes, endophenotypes, and biomarkers of disease that will facilitate diagnosis and predict treatment outcome. We are at the threshold of being able to predict treatment response, primarily through genetics and neuroimaging. In this review we discuss the most promising markers of treatment response and adverse effects emerging from the areas of pharmacogenetics and neuroimaging in depression and schizophrenia.