Combinatorial chemistry has had a major impact on the discovery and optimisation of potential lead compounds. This review details some of the fundamental principles behind combinatorial chemistry and describes a variety of methods employed in the search for new therapeutically interesting compounds including the concept of dynamic combinatorial chemistry as a method of selecting active compounds from a mixture. It also outlines methods used to analyse resin bound products and describes how solution phase library generation may be aided by the use of resin bound reagents and scavengers.