Inherited and acquired changes in pre-mRNA splicing have been documented to play a significant role in human disease development and many cancer-associated genes are regulated by alternative splicing. Loss of fidelity, variation of the splicing process, even controlled switching to specific splicing alternatives may occur during tumor progression and could play a major role in carcinogenesis. Splice variants that are found predominantly in tumors have clear diagnostic value and may provide potential drug targets. Moreover, understanding the process of aberrant splicing and the detailed characterization of the splice variants may prove crucial to our understanding of malignant transformation. This review discusses the basic mechanism of alternative splicing, alternative splicing in cancer-associated genes, tools to identify splice variants, and the development of clinical tests based on alternatively spliced biomarkers.