Recent advances in induced pluripotent stem cell technologies and phenotypic screening shape the future of bioactive small-molecule discovery. In this review we analyze the impact of small-molecule phenotypic screens on drug discovery as well as on the investigation of human development and disease biology. We further examine the role of 3D spheroid/organoid structures, microfluidic systems, and miniaturized on-a-chip systems for future discovery strategies. In highlighting representative examples, we analyze how recent achievements can translate into future therapies. Finally, we discuss remaining challenges that need to be overcome for the adaptation of the next generation of screening approaches.