Recently, two CPMP Points to Consider, one on adjustment for baseline covariates and the other on multiplicity issues in clinical trials, have included recommendations on the use of subgroup analysis for regulatory purposes. However, despite their regular use and regulatory attention, the validity and nature of subgroup analyses are still frequently questioned. This article provides guidance on when subgroup analyses can be done, when they should be done, and their interpretation. The validity of common regulatory claims based on subgroup analyses is then discussed.