Natural products represents an important source of new lead compounds in drug discovery research. Several drugs currently used as therapeutic agents have been developed from natural sources; plant sources are specifically important. In the past few decades, pharmaceutical companies demonstrated insignificant attention towards natural product drug discovery, mainly due to its intrinsic complexity. Recently, technological advancements greatly helped to address the challenges and resulted in the revived scientific interest in drug discovery from natural sources. This review provides a comprehensive overview of various approaches used in the selection, authentication, extraction/isolation, biological screening, and analogue development through the application of modern drug-development principles of plant-based natural products. Main focus is given to the bioactivity-guided fractionation approach along with associated challenges and major advancements. A brief outline of historical development in natural product drug discovery and a snapshot of the prominent natural drugs developed in the last few decades are also presented. The researcher’s opinions indicated that an integrated interdisciplinary approach utilizing technological advances is necessary for the successful development of natural products. These involve the application of efficient selection method, well-designed extraction/isolation procedure, advanced structure elucidation techniques, and bioassays with a high-throughput capacity to establish druggability and patentability of phyto-compounds. A number of modern approaches including molecular modeling, virtual screening, natural product library, and database mining are being used for improving natural product drug discovery research. Renewed scientific interest and recent research trends in natural product drug discovery clearly indicated that natural products will play important role in the future development of new therapeutic drugs and it is also anticipated that efficient application of new approaches will further improve the drug discovery campaign.