Drug discovery is complex and risky, and the chances of success are low. One starting point to discover a new drug is the selective screening of a collection of high value and good quality compounds. Selection of compounds for screening is one of the challenging initial steps in the drug discovery process and is crucial for the success of the project. Optimal selection will enhance the chances of successful hit finding with regard to both number and quality of hits. Several scenarios for compound selection can be envisaged, and are primarily driven by knowledge of the target. Deciding the most appropriate scenario is important and appropriate software packages and chemoinformatics tools are available for these purposes. After screening, researchers may face challenges in selecting the best hits for further optimization. Numerous chemoinformatics tools have emerged recently to address challenges in hit analysis, prioritization and optimization.