Background Genetic markers hold great promise for refining our ability to establish precise prognostic prediction for diseases. The development of comprehensive gene expression microarray technology has allowed the selection of relevant marker genes from a large pool of candidate genes in early-phased, developmental prognostic marker studies. The primary analytical task in such studies is to select a small fraction of relevant genes, typically from a list of significant genes, for further investigation in subsequent studies. Results We develop a methodology for predicting survival outcomes using subsets of significant genes in prognostic marker studies with microarrays. Key components in this methodology include building prediction models, assessing predictive performance of prediction models, and assessing significance of prediction results. As particular specifications, we assume Cox proportional hazard models with a compound covariate. For assessing predictive accuracy, we propose to use the cross-validated log partial likelihood. To assess significance of prediction results, we apply permutation procedures in cross-validated prediction. As an additional key component peculiar to prognostic prediction, we also consider incorporation of standard prognostic factors. The methodology is evaluated using both simulated and real data. Conclusion The developed methodology for prognostic prediction using a subset of significant genes can provide new insights based on predictive capability, possibly incorporating standard prognostic factors, in selecting a fraction of relevant genes for subsequent studies.