Biomarkers are essential for understanding the underlying pathologies in brain disorders and for developing effective treatments. Combined transcranial magnetic stimulation and electroencephalography (TMS-EEG) is an emerging neurophysiological tool that can be used for biomarker development. This method can identify biomarkers associated with the function and dynamics of the inhibitory and excitatory neurotransmitter systems and effective connectivity between brain areas. In this review, we outline the current state of the TMS-EEG biomarker field by summarizing the existing protocols and the possibilities and challenges associated with this methodology. •TMS-EEG is an emerging neurophysiological method for searching biomarkers.•TMS-EEG can measure neurotransmitter functionality and effective connectivity.•The main challenges are various artifacts that may influence the biomarkers.