The field of microfluidics or lab-on-a-chip technology aims to improve and extend the possibilities of bioassays, cell biology and biomedical research based on the idea of miniaturization. Microfluidic systems allow more accurate modelling of physiological situations for both fundamental research and drug development, and enable systematic high-volume testing for various aspects of drug discovery. Microfluidic systems are in development that not only model biological environments but also physically mimic biological tissues and organs; such 'organs on a chip' could have an important role in expediting early stages of drug discovery and help reduce reliance on animal testing. This Review highlights the latest lab-on-a-chip technologies for drug discovery and discusses the potential for future developments in this field.