The extent and duration of pharmacological action is determined by the lifetime of drug occupancy on a molecular target. This lifetime is defined by dynamic processes that control the rates of drug association and dissociation from the target. Recently, the term residence time has been coined to describe experimental measurements that can be related to the lifetime of the binary drug-target complex, and this in turn to durable, pharmacodynamic activity. The residence time concept and its impact on drug optimization are reviewed here. Examples are provided that demonstrate how a long residence time can improve drug efficacy in vivo. Additionally, optimization of drug-target residence time can help to mitigate off-target mediated toxicity, hence, improving drug safety and tolerability. Recent applications of the residence time concept to both drug discovery and development are also presented.