It is generally recognized that drug discovery and development are very time and resources consuming processes. There is an ever growing effort to apply computational power to the combined chemical and biological space in order to streamline drug discovery, design, development and optimization. In biomedical arena, computer-aided or in silico design is being utilized to expedite and facilitate hit identification, hit-to-lead selection, optimize the absorption, distribution, metabolism, excretion and toxicity profile and avoid safety issues. Commonly used computational approaches include ligand-based drug design (pharmacophore, a 3D spatial arrangement of chemical features essential for biological activity), structure-based drug design (drug-target docking), and quantitative structure–activity and quantitative structure–property relationships. Regulatory agencies as well as pharmaceutical industry are actively involved in development of computational tools that will improve effectiveness and efficiency of drug discovery and development process, decrease use of animals, and increase predictability. It is expected that the power of CADDD will grow as the technology continues to evolve