A novel approach to improve diagnosis and prognosis of pneumonia is the use of biomarkers. An ideal diagnostic biomarker for pneumonia should allow an early diagnosis and differential diagnosis from other, noninfectious conditions. Procalcitonin (PCT) has emerged as a reliable diagnostic marker in pneumonia, and is better when compared with other markers, namely C-reactive protein, leukocyte count and proinflammatory cytokines. A PCT-based diagnostic and therapeutic strategy can reduce antibiotic usage in patients with pneumonia, mainly by reducing the duration of antibiotic courses. However, PCT should not be used as a substitute for a careful clinical assessment. PCT levels may remain low in localized infections in the context of pneumonia, especially in patients with localized empyema. An ideal prognostic biomarker should be informative about the course and outcome of a disease. Various biomarkers, namely pro-adrenomedullin, natriuretic peptides, endothelin-1 precursor peptides, as well as copeptin and cortisol levels, are promising in this respect. Future studies will show whether an assessment with those novel biomarkers is able to guide prognostic decision-making and improve the allocation of healthcare resources and hospitalization costs.