This paper reviews the theoretical concepts and methods utilised with isolated tissues to characterise drugs and drug receptors. Specifically the impact, on the in vitro measurement of agonist affinity and relative efficacy, of the idea that receptors bind to transduction proteins in the lipid bilayer of the cell membrane is discussed. The effects of ternary complex formation of agonist-receptor equilibria raise theoretical objections to the measurement of agonist receptor equilibrium dissociation constants. Possible 'promiscuity' of receptors with respect to the G-proteins with which they can interact makes classification of receptors by agonists suspect. The use of Schild analysis for the measurement of antagonist affinity and subsequent classification of receptors is considered in the light of recent data showing that estimates calculated with this method are heterogeneous. Resultant analysis for the detection of allosteric effects is also discussed. Lastly, the impact of molecular biology on the drug and drug receptor classification process is considered, as well as the effects of pathological processes on drug action at the receptor level.