More than fifty years of pharmacogenetic research have produced many examples of the impact of inherited variability in the response to psychotropic drugs. These successes, however, have as yet failed to translate into broadly applicable strategies for the improvement of individual drug treatment in psychiatry. One important argument against the widespread adoption of pharmacogenetics as a clinical tool is the lack of evidence showing its impact on medical decision making and on risk benefit ratio for the patients. The individual drug metabolizing capacity is assessed by genotyping drug metabolizing enzymes. The potential implications of information gained from genotyping are dose adjustments according to genotype. However, even when the consequences of genotype on pharmacokinetics are significant and well known, as in the case of many tricyclic antidepressants and several SSRIs, there is still considerable controversy on whether adjustment of dosage driven by genetic information may improve therapeutic efficacy, and/or adverse events is prevented, to an extent of any practical importance in clinical practice. Different types of pharmacogenetic studies may improve our understanding of the functional consequence of a genetic variant in the clinical setting. The use of intermediate phenotypes instead of broad outcome parameters such as drug response or remission might improve our knowledge on what exactly happens if an individual with a specific genotype takes a certain drug. Here, we review the potential impact of an integrated approach, including the assessment of intermediate phenotypes for the effect of genetic polymorphism, the monitoring of therapy progress, and response prediction in depression.