Miniaturization can expand the capability of existing bioassays, separation technologies and chemical synthesis techniques. Although a reduction in size to the micrometre scale will usually not change the nature of molecular reactions, laws of scale for surface per volume, molecular diffusion and heat transport enable dramatic increases in throughput. Besides the many microwell-plate- or bead-based methods, microfluidic chips have been widely used to provide small volumes and fluid connections and could eventually outperform conventionally used robotic fluid handling. Moreover, completely novel applications without a macroscopic equivalent have recently been developed. This article reviews current and future applications of microfluidics and highlights the potential of 'lab-on-a-chip' technology for drug discovery.