Similarity is a subjective and multifaceted concept, regardless of whether compounds or any other objects are considered. Despite its intrinsically subjective nature, attempts to quantify the similarity of compounds have a long history in chemical informatics and drug discovery. Many computational methods employ similarity measures to identify new compounds for pharmaceutical research. However, chemoinformaticians and medicinal chemists typically perceive similarity in different ways. Similarity methods and numerical readouts of similarity calculations are probably among the most misunderstood computational approaches in medicinal chemistry. Herein, we evaluate different similarity concepts, highlight key aspects of molecular similarity analysis, and address some potential misunderstandings. In addition, a number of practical aspects concerning similarity calculations are discussed.