Multidrug resistance (MDR) is a major cause of failure in cancer chemotherapy. P-glycoprotein (P-gp), a promiscuous drug efflux pump, has been extensively studied for its association with MDR due to overexpression in cancer cells. Several P-gp inhibitors or modulators have been investigated in clinical trials in hope of circumventing MDR, with only limited success. Alternative strategies are actively pursued, such as the modification of existing drugs, development of new drugs, or combination of novel drug delivery agents to evade P-gp-dependent efflux. Despite the importance and numerous studies, these efforts have mostly been undertaken without a priori knowledge of how drugs interact with P-gp at the molecular level. This review highlights and discusses progress toward and challenges impeding drug development for inhibiting or evading P-gp in the context of our improved understanding of the structural basis and mechanism of P-gp-mediated MDR.