Numerous important drugs target cytokines and growth factors or their receptors. Our understanding of the molecular mechanisms governing receptor activation and signaling has lagged in key areas, however, limiting drug discovery efforts to relatively few basic strategies. Recently, substantial progress has been made on several aspects of this problem. These include improved methods for establishing the mechanism of receptor activation, a clearer understanding of the biochemical basis for differential signaling by ligands that act through a common receptor, new methods for measuring the affinities of steps in receptor activation on live cells, and progress toward a systems level understanding of receptor signaling. These advances are providing a new understanding of the function of these receptors that presents opportunities for the development of improved drugs.