The discovery of new pharmaceuticals via computer modeling is one of the key challenges in modern medicine. The advent of global networks of genomic, proteomic and metabolomic endeavors is ushering in an increasing number of novel and clinically important targets for screening. Computational methods are anticipated to play a pivotal role in exploiting the structural and functional information to understand specific molecular recognition events of the target macromolecule with candidate hits leading ultimately to the design of improved leads for the target. In this review, we sketch a system independent, comprehensive physicochemical pathway for lead molecule design focusing on the emerging in silico trends and techniques. We survey strategies for the generation of candidate molecules, docking them with the target and ranking them based on binding affinities. We present a molecular level treatment for distinguishing affinity from specificity of a ligand for a given target. We also discuss some significant aspects of drug absorption, distribution, metabolism, excretion and toxicity (ADMET) and highlight improved protocols required for higher quality and throughput of in silico methods employed at early stages of discovery. We present a realization of the various stages in the pathway proposed with select examples from the literature and from our own research to demonstrate the way in which an iterative process of computer design and validation can aid in developing potent leads. The review thus summarizes recent advances and presents a viewpoint on improvements envisioned in the years to come for automated computer aided lead molecule discovery.