Wastewater effluents, groundwater, surface water, sediments, soils and air particulate matter are often contaminated by a multitude of chemicals. Since often no a priori knowledge of relevant toxicants exists, chemical analysis alone is not an appropriate tool for hazard assessment. Instead, a linkage of effect data and hazardous compounds is required. For that purpose, effect-directed analysis (EDA) was developed, which is based on a combination of biotesting, fractionation procedures and chemical analytical methods. Since a controversial discussion about the prospects of success in relation to the expense exists, the current methodological state of EDA for organic toxicants in complex mixtures and important results are reviewed in this paper with the aim of establishing criteria for the successful use of this promising tool. While EDA is a powerful tool to identify specifically acting individual toxicants close to the source of emission, it is inappropriate for screening purposes and often may fail in remote areas where the concentrations of specific toxicants are too low relative to the nonspecific toxicity of the whole mixture of natural and anthropogenic compounds. The biological tools have to be carefully selected with respect to their ability to detect specific effects and their significance in hazard assessment. Sophisticated chemical tools are required to identify individual toxicants in mixtures of thousands of compounds, which are typical for contaminated environments.