Combinatorial chemistry is now considered as one of the most important recent advances in medicinal chemistry. There are five general approaches in combinatorial peptide library methods: biological libraries; spatially addressable parallel solid phase or solution phase libraries; synthetic library methods requiring deconvolution; the 'one-bead one-compound' library method; and synthetic library methods using affinity chromatography selection. Except for the biological library approach, which is limited to peptide libraries with eukaryotic amino acids, all the other four synthetic approaches are applicable to peptide, non-peptide oligomer or small molecule libraries. Although non-peptide or small molecule libraries are generally prepared by a synthetic approach, recent advances in biosynthetic methods using enzymes may enable one to prepare chemical libraries that are otherwise difficult to synthesize chemically. In the 'one-bead one-compound' library method every member of the library is screened in parallel, but the chemical structure of the positive compound-bead has to be determined either directly or via an encoding strategy. A reliable high-throughput biological assay is needed for a successful combinatorial library screen. Solid-phase binding or functional assays as well as solution phase assays have been used successfully in various library methods. There has been enormous progress in the technological advances of molecular biology and the fundamental understanding of the molecular basis of cancer in recent years. By applying combinatorial chemistry and computational chemistry to the many cancer targets that have recently been identified, it is hopeful that more potent, more specific and less toxic anti-cancer agents will be developed in the foreseeable future. In addition to being a great tool for drug discovery, combinatorial chemistry has also proven to be invaluable in basic research. A few specific examples of the applications of combinatorial chemistry in basic cancer research and drug discovery are described in this mini-review.