Elucidation of the changes in gene expression associated with biological processes is a central problem in biology. Advances in molecular and computational biology have led to the development of powerful, high-throughput methods for the analysis of differential gene expression. These tools have opened up new opportunities in disciplines ranging from cell and developmental biology to drug development and pharmacogenomics. In this review, the attributes of five commonly used differential gene expression methods are discussed: expressed sequence tag (EST) sequencing, cDNA microarray hybridization, subtractive cloning, differential display, and serial analysis of gene expression (SAGE). The application of EST sequencing and microarray hybridization is illustrated by the discovery of novel genes associated with osteoblast differentiation. The application of subtractive cloning is presented as a tool to identify genes regulated in vivo by the transcription factor pax-6. These and other examples illustrate the power of genomics for discovering novel genes that are important in biology and which also represent new targets for drug development. The central theme of the review is that each of the approaches to identifying differentially expressed genes is useful, and that the experimental context and subsequent evaluation of differentially expressed genes are the critical features that determine success.