The development of new drugs with potential therapeutic applications is one of the most complex and difficult process in the pharmaceutical industry. Millions of dollars and man-hours are devoted to the discovery of new therapeutical agents. As, the activity of a drug is the result of a multitude of factors such as bioavailability, toxicity and metabolism, rational drug design has been utopias for centuries. Very recently, impressive technological advances in areas such as structural characterization of biomacromolecules, computer sciences and molecular biology have made rational drug design feasible. The aim of this review is to give an outline of studies in the field of medicinal chemistry in which molecular modeling has helped in the discovery process of new drugs. The emphasis will be on lead generation and optimization.