Abstract Background The advent of high-throughput experimentation in biochemistry has led to the generation of vast amounts of chemical data, necessitating the development of novel analysis, characterization, and cataloguing techniques and tools. Recently, a movement to publically release such data has advanced biochemical structure-activity relationship research, while providing new challenges, the biggest being the curation, annotation, and classification of this information to facilitate useful biochemical pattern analysis. Unfortunately, the human resources currently employed by the organizations supporting these efforts (e.g. ChEBI) are expanding linearly, while new useful scientific information is being released in a seemingly exponential fashion. Compounding this, currently existing chemical classification and annotation systems are not amenable to automated classification, formal and transparent chemical class definition axiomatization, facile class redefinition, or novel class integration, thus further limiting chemical ontology growth by necessitating human involvement in curation. Clearly, there is a need for the automation of this process, especially for novel chemical entities of biological interest. Results To address this, we present a formal framework based on Semantic Web technologies for the automatic design of chemical ontology which can be used for automated classification of novel entities. We demonstrate the automatic self-assembly of a structure-based chemical ontology based on 60 MeSH and 40 ChEBI chemical classes. This ontology is then used to classify 200 compounds with an accuracy of 92.7%. We extend these structure-based classes with molecular feature information and demonstrate the utility of our framework for classification of functionally relevant chemicals. Finally, we discuss an iterative approach that we envision for future biochemical ontology development. Conclusions We conclude that the proposed methodology can ease the burden of chemical data annotators and dramatically increase their productivity. We anticipate that the use of formal logic in our proposed framework will make chemical classification criteria more transparent to humans and machines alike and will thus facilitate predictive and integrative bioactivity model development.