Regulators and healthcare payers are increasingly demanding evidence that biomarkers deliver patient benefits to justify their use in clinical practice. Laboratory professionals need to be familiar with these evidence requirements to better engage in biomarker research and decisions about their appropriate use. This paper by a multidisciplinary group of the European Federation of Clinical Chemistry and Laboratory Medicine describes the pathway of a laboratory assay measuring a biomarker to becoming a medically useful test. We define the key terms, principles and components of the test evaluation process. Unlike previously described linearly staged models, we illustrate how the essential components of analytical and clinical performances, clinical and cost-effectiveness and the broader impact of testing assemble in a dynamic cycle. We highlight the importance of defining clinical goals and how the intended application of the biomarker in the clinical pathway should drive each component of test evaluation. This approach emphasizes the interaction of the different components, and that clinical effectiveness data should be fed back to refine analytical and clinical performances to achieve improved outcomes. The framework aims to support the understanding of key stakeholders. The laboratory profession needs to strengthen collaboration with industry and experts in evidence-based medicine, regulatory bodies and policy makers for better decisions about the use of new and existing medical tests.