Combinatorial chemistry is redefining the way pharmaceuticals and other high performance chemicals and materials are discovered and developed. Less than a decade ago, combinatorial chemistry was roundly heralded as the successor to rational drug design. It afforded faster, less expensive and more comprehensive exploitation of new drug targets. In fact, these two techniques are now routinely used in tandem in any given discovery project. As with every new technological breakthrough, combinatorial chemistry imposes new operational constraints while improving the efficiency of discovery operations. Examples of these will be discussed. Combinatorial chemistry is now part of the mainstream staff resources of drug discovery companies, who regard the in-house capability as fundamental to their business operations. For the smaller, entrepreneurial companies, this has led to a period of acquisition and industry consolidation.