Drug discovery is a sophisticated process that incorporates scientific innovations and cutting-edge technologies. Compared to traditional bioactivity-based screening methods, encoding and display technologies for combinatorial libraries have recently advanced from proof-of-principle experiments to promising tools for pharmaceutical hit discovery due to their high screening efficiency, throughput, and resource minimization. This review systematically summarizes the development history, typology, and prospective applications of encoding and displayed technologies, including phage display, ribosomal display, mRNA display, yeast cell display, one-bead one-compound, DNA-encoded, peptide nucleic acid-encoded, and new peptide-encoded technologies, and examples of preclinical and clinical translation. We discuss the progress of novel targeted therapeutic agents, covering a spectrum from small-molecule inhibitors and nonpeptidic macrocycles to linear, monocyclic, and bicyclic peptides, in addition to antibodies. We also address the pending challenges and future prospects of drug discovery, including the size of screening libraries, advantages and disadvantages of the technology, clinical translational potential, and market space. This review is intended to establish a comprehensive high-throughput drug discovery strategy for scientific researchers and clinical drug developers.