Environmental DNA (eDNA) comprises DNA fragments that have been shed into the environment by organisms, and which can be extracted from environmental samples such as water or soil. Characterization of eDNA can allow researchers to infer the presence or absence of species from a particular site without the need to locate and identify individuals, and therefore may provide an extremely valuable tool for quantifying biodiversity. However, as is often the case with relatively new protocols, methodological challenges remain. A number of earlier reviews have discussed these challenges, but none have provided extensive treatment of the critical decisions surrounding molecular markers and primer development for use in eDNA assays. This review discusses a number of options and approaches that can be used when determining which primers and gene regions are most appropriate for either targeted species detection or metabarcoding macro-organisms from eDNA. The latter represents a new field that is growing rapidly, and which has the potential to revolutionize future assessments of community and ecosystem diversity.