The application of a single dose of a CNS active drug with a well-defined mode of action on a neurotransmitter or neuromodulator system may be used for testing pharmaco-physiological properties of transcranial magnetic stimulation (TMS) measures of cortical excitability. Conversely, a physiologically well-defined single TMS measure of cortical excitability may be used as a biological marker of acute drug effects at the systems level of the cerebral cortex. An array of defined TMS measures may be used to study the pattern of effects of a drug with unknown or multiple modes of action. Acute drug effects may be rather different from chronic drug effects. These differences can also be studied by TMS measures. Finally, TMS or repetitive TMS by themselves may induce changes in endogenous neurotransmitters or neuromodulators. All these possible interactions are the focus of this in-depth review on TMS and drugs.