Discovery of new medicines is a very difficult, costly and time consuming process. Despite all the recent spectacular advances in the biological and medical research, finding a pharmacologically effective new chemical entity requires a significant multidisciplinary effort from both academic and pharmaceutical industry laboratories. Over the last three decades macromolecular crystallography has become an integral part of the process, used in target evaluation, discovery of new chemical leads and lead optimization. An overview of the role played by structural biology, especially protein crystallography, in the discovery of new drugs will be presented, along with current strategies utilized by leading pharmaceutical laboratories. Several examples of structure-assisted drug discovery projects will be shown to illustrate the power of crystallography to influence the direction of research, as well as challenges where it is powerless to help.