The current mini-review explains how fragmental methods (FMs) can be used in the analysis and prediction of physicochemical properties and biological activities. The considered properties include log P, solubility, pK(a), intestinal permeability, P-gp substrate specificity and toxicity. The focus will be a description of a "mechanistic" approach, which implies a gradual reduction of alternative explanations for any property or activity. This means a flexible construction of fragmental parameters using large amounts of experimental data. Since biological activities involve multiple (unknown) target macromolecules with multiple binding modes, a stepwise classification (C-SAR) analysis is most useful. It involves the following procedures: (i). construction of physicochemical profiles using parameters that can be reliably predicted, (ii). identification of reactive functional groups and the largest active skeletons, (iii). generalization of these groups and skeletons in terms of "site-specific physicochemical profiling". This entails a dynamic construction of 2D pharmacophores that can be converted into 3D models.