In this chapter we give an overview of the two major approaches used in NMR and drug discovery: structure‐based design and NMR‐based screening. Combined with the more traditional uses of NMR in medicinal chemistry, they demonstrate the versatility of NMR as a tool for drug discovery. Structure‐based design is considered in two parts, ligand‐based design and receptor‐based design. In the former, NMR provides information on structure elucidation of drug leads, conformational analysis, charge state, tautomeric equilibria, and molecular dynamics and assists in the development of pharmacophore models. In receptor‐based design NMR allows the structures of macromolecular drug targets to be determined and their interactions with ligands to be elucidated. NMR‐based screening is a newer application of NMR technology in drug discovery but it is showing great promise as a tool for lead generation and optimization. Screening approaches based on chemical‐shift perturbation, magnetization transfer, diffusion, relaxation, NOEs, and spin labels are described. The utility of NMR has been enhanced over the last decade by developments in both instruments and methodology. On the instrumental side, increases in magnetic field strengths and the development of cryoprobes have increased sensitivity. Linkages of NMR to liquid chromatography and/or mass spectrometry have increased versatility. On the methods front there have been a range of new approaches discovered that will enhance the study of larger molecular complexes. Advances in protein expression and labeling have played a major role in stimulating the development of new NMR pulse sequences to extract information from such complexes.