This article presents the theoretical and practical aspects involved in the design and analysis of pharmacokinetic-pharmacodynamic modelling studies. The main features of the protocol of pharmacokinetic-pharmacodynamic studies are discussed with special focus on experimental designs in relation to individual and population approaches. Some basic pharmacodynamic models (such as linear, log-linear, hyperbolic and sigmoid models) are presented as well as more complex time-dependent models (effect compartment and physiological indirect response, tolerance models) which are required when the concentration-effect relationship shows a hysteresis loop. The methods of estimation, with special focus on the individual and populations approaches, are covered, along with the way pharmacodynamic models and methods of estimation can be applied to real data and the information required to criticise the results of modelling. We also present some real problems frequently encountered when performing pharmacokinetic-pharmacodynamic modelling and give some potential solutions (problems with hysteresis loops, lack of convergence, problems with residuals). The last section discusses the significance of pharmacodynamic parameters.