Drug therapy for children is one of the cornerstone developments that have sharply reduced childhood mortality. Despite this, many challenges remain in ensuring that children receive safe and effective drug therapy. There are unique issues in treating children with oral medication relating to development, existing formulations and medication acceptability. Medication acceptability in children is complex relating to a wide range of factors, including drug palatability. Over the past decade there has been an increasing interest in and research as to how to improve and enhance child-specific drug formulations including the development of specific instruments for assessing drug palatability in children and new approaches to teaching medication literacy to families. Approaches to enhancing drug acceptability have also included organoleptic (taste masking) strategies as well as the creation of a number of innovative taste-blocking strategies and new technologies for formulation preparation. Polymer coating, microencapsulation and heat melt technologies have resulted in drug formulations that are now being assessed in children while soft melt and gel formulations are now commonly used. Mini-tablets offer the potential of using solid delivery systems in even very young infants. This work has resulted in a number of highly promising developments that are being evaluated for clinical use as well as providing insights into new directions in pursuit of the common goal of effective and safe drug therapy for children. On-going challenges include the need for drug regulatory agencies to work closely with drug regulatory agencies in facilitating innovation in formulation design and approval.