Neuraxial drug administration, i.e., the injection of drugs into the epidural or intrathecal space to produce anesthesia or analgesia, is a technique developed more than 120 years ago. Today, it still is widely used in daily practice in anesthesiology and in acute and chronic pain therapy. A multitude of different drugs have been introduced for neuraxial injection, only a part of which have obtained official approval for that indication. A broad understanding of the pharmacology of those agents is essential to the clinician to utilize them in a safe and efficient manner. In the present narrative review, we summarize current knowledge on neuraxial anatomy relevant to clinical practice, including pediatric anatomy. Then, we delineate the general pharmacology of neuraxial drug administration, with particular attention to specific aspects of epidural and intrathecal pharmacokinetics and pharmacodynamics. Furthermore, we describe the most common clinical indications for neuraxial drug administration, including the perioperative setting, obstetrics, and chronic pain. Then, we discuss possible neurotoxic effects of neuraxial drugs, and moreover, we detail the specific properties of the most commonly used neuraxial drugs that are relevant to clinicians who employ epidural or intrathecal drug administration, in order to ensure adequate treatment and patient safety in these techniques. Finally, we give a brief overview on new developments in neuraxial drug therapy.