The cure rates for childhood acute leukemia have dramatically improved to approximately 70% overal, with treatments that include intensive cytotoxic chemotherapy and, in some cases, hematopoietic stem cell transplantation. However, many children still die of their disease or of treatment-related toxicities. Even in patients that are cured, there can be significant and, not uncommonly debilitating, acute and late complications of treatment. Improved understanding of the molecular and cellular biology of leukemia and the increasing availability of high-throughput genomic techniques have facilitated the development of molecularly targeted therapies that have the potential to be more effective and less toxic than the standard approaches. In this article, we review the progress to date with agents that are showing promise in the treatment of childhood acute leukemia, including monoclonal antibodies, inhibitors of kinases and other signaling molecules (e.g., BCR-ABL, FLT3, farnesyltransferase, mTOR and γ-secretase), agents that target epigenetic regulation of gene expression (DNA methyltransferase inhibitors and histone deacetylase inhibitors) and proteasome inhibitors. For the specific agents in each of these classes, we summarize the published preclinical data and the clinical trials that have been completed, are in progress or are being planned for children with acute leukemia. Finally, we discuss potential challenges to the success of molecularly targeted therapy, including proper target identification, adequate targeting of leukemia stem cells, developing synergistic and tolerable combinations of agents and designing adequately powered clinical trials to test efficacy in molecularly defined subsets of patients.