The use of biomarkers is becoming increasingly intrinsic to the practice of medicine and holds great promise for transforming the practice of rheumatology. Biomarkers have the potential to aid clinical diagnosis when symptoms are present or to provide a means of detecting early signs of disease when they are not. Some biomarkers can serve as early surrogates of eventual clinical outcomes or guide therapeutic decision making by enabling identification of individuals likely to respond to a specific therapy. Using biomarkers might reduce the costs of drug development by enabling individuals most likely to respond to be enrolled in clinical trials, thereby minimizing the number of participants required. In this Review, we discuss the current use and the potential of biomarkers in rheumatology and in select fields at the forefront of biomarker research. We emphasize the value of different types of biomarkers, addressing the concept of 'actionable' biomarkers, which can be used to guide clinical decision making, and 'mechanistic' biomarkers, a subtype of actionable biomarker that is embedded in disease pathogenesis and, therefore, represents a potentially superior biomarker. We provide examples of actionable and mechanistic biomarkers currently available, and discuss how development of such biomarkers could revolutionize clinical practice and drug development.