Abstract The objective of pharmacokinetic/pharmacodynamic (PK/PD) modelling is to characterize and predict the time course of drug effects under physiological and pathological conditions. As such, PK/PD modelling provides the scientific basis for (i) optimization of the dosing and delivery profile of new and existing drugs, and (ii) dose adjustment in special populations. At present, PK/PD modelling is developing from a rather empirical descriptive discipline into a mechanistic science that can be applied at almost all stages of drug development. Key elements in this development are (i) the incorporation of receptor theory, and (ii) the application of dynamic systems analysis. Another important feature is characterisation of the interaction between PK/PD and disease progression. In this chapter, the development and application of mechanism-based PK/PD models is discussed for CNS active drugs with special reference to opiates and benzodiazepines. It is shown that mechanism-based PK/PD models exhibit favourable properties for extrapolation and prediction. Furthermore, it is shown that they provide a useful basis for the development, evaluation and validation of biomarkers.