For understanding of the pathophysiology of multiple myeloma, features of the malignant clone and changes induced by the bone-marrow microenvironment are equally important. Multiple myeloma plasma cells, which originate from postfollicular B cells, are characterised by complex chromosomal aberrations. Among the earliest genetic events are translocations of the immunoglobulin heavy-chain gene locus, which leads to dysregulation of oncogenes at translocation partner regions (cyclin D1 at 11q13, FGFR3/MMSET at 4p16.3, c-MAF at 16q23, and cyclin D3 at 6p21), and deletions of 13q14, the site of a putative tumour suppressor gene, which is an adverse prognostic indicator. Additional molecular events include epigenetic changes and activation of oncogenes (mutations of N-RAS and K-RAS, and changes in c-MYC), which are usually associated with disease progression. Bone-marrow stromal cells support growth and survival of multiple myeloma cells via various cytokines. Osteoclast activity factors (in particular MIP1alpha) and imbalances between RANKL and osteoprotegerin are major factors for the development of myeloma bone disease. Further characterisation of crucial events in the development of monoclonal gammopathies by novel techniques such as global gene expression profiling will contribute to a molecular classification of multiple myeloma and foster future therapeutic approaches.