Single-cell technologies, especially single-cell RNA sequencing (scRNA-seq), along with the accompanying computational tools and an expanding repository of public data, are revolutionizing the process of drug discovery and development. These advancements are opening new avenues for target identification, thanks to enhanced understanding of diseases via cell subtyping. Additionally, the integration of scRNA-seq into highly multiplexed functional genomics screens is improving the processes of target credentialing and prioritization. scRNA-seq plays a crucial role in selecting appropriate preclinical disease models and offers fresh perspectives on the mechanisms of action of drugs. scRNA-seq contributes to decision-making processes by facilitating better biomarker identification for patient stratification, offering more accurate means to track drug responses and disease progression. This chapter sheds light on how scRNA-seq techniques are being implemented across various stages of drug discovery and development while also addressing the persistent challenges faced by the pharmaceutical industry in adopting these technologies.