We describe a method for incorporating pharmacokinetic (PK) data into dose escalation clinical trial designs. Doing so can improve the efficiency and accuracy of these studies. The method proposed uses a parametric dose response function that models the probability of response in each person with two effects: the dose of drug administered and an ancillary pharmacokinetic measurements. After treatment and observation of each subject (or group of subjects) for response, one calculates the dose to be administered to the next individual (or group) to yield the target probability of response from the current best estimate of the dose-response curve. This procedure is a variant of the continual reassessment method (CRM). Statistical simulations employing a logistic dose-response model (that is, we model the logit of the response probability as a linear combination of predictors), dose of drug, and the area under the time-concentration curve (AUC) demonstrate that the addition of pharmacokinetic information to the CRM is a practical and useful way to improve both dose-response modelling and the design of dose escalation studies.