Over the past 15 years the privileged structure concept has emerged as a fruitful approach to the discovery of novel biologically active molecules. Privileged structures are molecular scaffolds with versatile binding properties, such that a single scaffold is able to provide potent and selective ligands for a range of different biological targets through modification of functional groups. In addition, privileged structures typically exhibit good drug-like properties, which in turn leads to more drug-like compound libraries and leads. The net result is the production of high quality leads that provide a solid foundation for further development. The identification of privileged structures will be discussed, emphasizing the importance of understanding the structure-target relationships that confer “privileged” status. This understanding allows privileged structure based libraries to be targeted at distinct target families (e.g. GPCRs, LGIC, enzymes / kinases). Privileged structures have been successfully exploited across and within different target families and promises to be an effective approach to the discovery and optimization of novel bioactive molecules. The application of the privileged structure approach, both in traditional medicinal chemistry and in the design of focused libraries, will be discussed with the aid of illustrative examples.