Chlorine is one of the most common atoms present in small-molecule drugs beyond carbon, hydrogen, nitrogen and oxygen. There are currently more than 250 FDA-approved chlorine-containing drugs, yet the beneficial effect of the chloro substituent has not yet been reviewed. The simple substitution of a hydrogen atom (R = H) with a chlorine atom (R = Cl) can result in incredible improvements in potency of up to 100,000-fold, and can lead to profound effects on pharmacokinetic parameters such as clearance, half-life, and drug exposure in vivo. Following the literature terminology of “magic methyl effect” in drugs, the term “magic chloro effect” has been coined herein. Reports of 500-fold or >1000-fold potency improvement are often serendipitous discoveries that can be considered “magic” rather than planned. However, hypotheses made to explain the magic chloro effect can lead to lessons that accelerate the cycle of drug discovery. With this in mind, we believe that medicinal chemists should place chlorine atoms into their lead scaffolds in judicious fashion, and organic chemists should invent more methods to place chlorine atoms selectively onto complex molecules.