It is a commonly accepted assumption that only unbound drug molecules are available to interact with their targets. In order to achieve high unbound plasma drug concentration, it seems obvious to design compounds with low plasma protein binding. Similarly to achieve high unbound tissue concentration, we apparently need compounds with low tissue binding. Our theoretical analysis and experimental data demonstrate that unbound plasma concentration is not determined by plasma protein binding but by hepatic intrinsic clearance after oral dose, and unbound tissue concentration is not determined by tissue binding but determined by unbound plasma concentration and transport properties at the blood-tissue barrier. Reduction of plasma and tissue protein binding for a compound will increase the unbound concentration in vitro but may not increase its unbound plasma or tissue concentration in vivo after oral administration. We conclude that plasma protein and tissue binding are essential parameters to understand pharmacokinetics and pharmacodynamics but they should not be optimized independently in drug discovery. Instead we should focus on reducing clearance and efflux at the blood-tissue barrier to increase in vivo plasma and tissue unbound concentration.