The introduction of combinatorial chemistry groups into pharmaceutical companies provoked a desire for efficient and effective methods for library design and optimisation. This, in turn, has resulted in a large number of scientific publications, detailing a variety of approaches to the problem. This review attempts to describe the major works in the literature, to set them in context both chronologically and scientifically, and to identify the outstanding challenges that must be addressed, if this area of research is to maintain the rapid progress seen hitherto.