Functional genomics is the study of gene function through the parallel expression measurements of genomes, most commonly using the technologies of microarrays and serial analysis of gene expression. Microarray usage in drug discovery is expanding, and its applications include basic research and target discovery, biomarker determination, pharmacology, toxicogenomics, target selectivity, development of prognostic tests and disease-subclass determination. This article reviews the different ways to analyse large sets of microarray data, including the questions that can be asked and the challenges in interpreting the measurements.