The resurgence of cancer immunotherapy stems from an improved understanding of the tumor microenvironment. The PD-1/PD-L1 axis is of particular interest, in light of promising data demonstrating a restoration of host immunity against tumors, with the prospect of durable remissions. Indeed, remarkable clinical responses have been seen in several different malignancies including, but not limited to, melanoma, lung, kidney, and bladder cancers. Even so, determining which patients derive benefit from PD-1/PD-L1-directed immunotherapy remains an important clinical question, particularly in light of the autoimmune toxicity of these agents. The use of PD-L1 (B7-H1) immunohistochemistry (IHC) as a predictive biomarker is confounded by multiple unresolved issues: variable detection antibodies, differing IHC cutoffs, tissue preparation, processing variability, primary versus metastatic biopsies, oncogenic versus induced PD-L1 expression, and staining of tumor versus immune cells. Emerging data suggest that patients whose tumors overexpress PD-L1 by IHC have improved clinical outcomes with anti-PD-1-directed therapy, but the presence of robust responses in some patients with low levels of expression of these markers complicates the issue of PD-L1 as an exclusionary predictive biomarker. An improved understanding of the host immune system and tumor microenvironment will better elucidate which patients derive benefit from these promising agents.