The identification of the mechanism of action and therapeutic potential of bioactive small molecules remains a considerable challenge in the field of drug discovery and chemical biology. Apart from traditional target identification techniques, new tools have emerged that can significantly aid mechanism elucidation efforts. The development of pattern matching algorithms that compare transcription profile data to analogous data on compounds with known cellular targets allows for mechanistic insights without the need to synthesize chemically modified probes. In addition, such methods can be used to connect small molecules to particular disease states, thus aiding the rational identification of candidate therapeutics. Another method with considerable potential is whole-genome RNAi screening, a technique that can identify critical upstream proteins involved in a small molecule's mechanism of action. Several proof-of-concept studies using compounds with known cellular targets suggest this tool will enable mechanistic characterization of bioactive small molecules with unknown mechanisms. This Review highlights recent successes in using these pattern matching and chemical genetic tools, with the goal of uncovering small molecule mechanisms and identifying therapeutic candidates for disease treatment.