Lipophilicity, often expressed as distribution coefficients (log D) in octanol/water, is an important physicochemical parameter influencing processes such as oral absorption, brain uptake and various pharmacokinetic (PK) properties. Increasing log D values increases oral absorption, plasma protein binding and volume of distribution. However, more lipophilic compounds also become more vulnerable to P450 metabolism, leading to higher clearance. Molecular size and hydrogen bonding capacity are two other properties often considered as important for membrane permeation and pharmacokinetics. Interrelationships among these physicochemical properties are discussed. Increasing size (molecular weight) often gives higher potency, but inevitably also leads to either higher lipophilicity, and hence poorer dissolution/solubility, or to more hydrogen bonding capacity, which limits oral absorption. Differences in optimal properties between gastrointestinal absorption and uptake into the brain are addressed. Special attention is given to the desired lipophilicity of CNS drugs. In examples using beta-blockers, Ca channel antagonists and peptidic renin inhibitors we will demonstrate how potency and pharmacokinetic properties need to be balanced.