A primary challenge in the analysis of high-throughput biological data is the abundance of correlated variables. A small change to a gene's expression or a protein's binding availability can cause significant downstream effects. The existence of such chain reactions presents challenges in numerous areas of analysis. By leveraging knowledge of the network interactions that underlie this type of data, we can often enable better understanding of biological phenomena. This dissertation will examine network-based statistical approaches to the problems of mechanism-of-action inference, characterization of gene expression changes, and prediction of drug response. First, we develop a method for multi-target perturbation detection in multi-omics biological data. We estimate a joint Gaussian graphical model across multiple data types using penalized regression, and filter for network effects. Next, we apply a set of likelihood ratio tests to identify the most likely site of the original perturbation. We also present a conditional testing procedure to allow for detection of secondary perturbations. Second, we address the problem of characterization of cellular phenotypes via Bayesian regression in the Gene Ontology (GO). In our model, we use the structure of the GO to assign changes in gene expression to functional groups, and to model the covariance between these groups. In addition to describing changes in expression, we use these functional activity estimates to predict the expression of unobserved genes. We further determine when such predictions are likely to be inaccurate by identifying GO terms with poor agreement to gene-level estimates. In a case study, we identify GO terms relevant to changes in the growth rate of S. cerevisiae. Lastly, we consider the prediction of drug sensitivity in cancer cell lines based on pathway-level activity estimates from ASSIGN, a Bayesian factor analysis model. We use penalized regression to predict response to various cancer treatments based on cancer subtype, pathway activity, and 2-way interactions thereof. We also present network representations of these interaction models and examine common patterns in their structure across treatments.