Effect-directed analysis (EDA) combined with nontarget screening (NTS) has established a valuable tool for the identification of unmonitored toxic substances in environmental samples. It consists of three main steps: (1) highly potent fraction identification, (2) toxicant candidate selection, and (3) major toxicant identification. Here, we discuss the methodology, current status, limitations, and future challenges of EDA combined with NTS. This method has been applied successfully to various environmental samples, such as sediments, wastewater treatment plant effluents, and biota. We present several case studies and highlight key results. EDA has undergone significant technological advancements in the past 20 years, with the establishment of its key components: target chemical analysis, bioassays, fractionation, NTS, and data processing. However, it has not been incorporated widely into environmental monitoring programs. We provide suggestions for the application of EDA combined with NTS in environmental monitoring programs and management, with the identification of further research needs.