Drug discovery is almost exclusively an activity of the pharmaceutical industry, and given this industrial background, research in this field is characterized by a combination of the pragmatic and the speculative. Novel methods are embraced with great enthusiasm in the hope of finding shortcut in the hit-or-miss process of discovering leads, but till now the perspective of traditional medicinal chemistry still remains central. Computer-aided drug design has emerged as a powerful technique in drug discovery process. Recent developments in computational approaches such as pharmacophore-based approaches, structure-based approaches, and combinatorial chemistry are threatening to turn tradition upside-down. Rapid advances in drug discovery, brought about through new technologies, will reduce the time and cost of discovering process as well as help us to design better and more efficient drugs. In this review, the traditional approaches to drug discovery are described, and we will attempt to outline the latest computer aided drug design tools that medicinal chemists are currently employing to drug discovery.