Accurate in silico prediction of protein–ligand binding affinities has been a primary objective of structure-based drug design for decades due to the putative value it would bring to the drug discovery process. However, computational methods have historically failed to deliver value in real-world drug discovery applications due to a variety of scientific, technical, and practical challenges. Recently, a family of approaches commonly referred to as relative binding free energy (RBFE) calculations, which rely on physics-based molecular simulations and statistical mechanics, have shown promise in reliably generating accurate predictions in the context of drug discovery projects. This advance arises from accumulating developments in the underlying scientific methods (decades of research on force fields and sampling algorithms) coupled with vast increases in computational resources (graphics processing units and cloud infrastructures). Mounting evidence from retrospective validation studies, blind challenge predictions, and prospective applications suggests that RBFE simulations can now predict the affinity differences for congeneric ligands with sufficient accuracy and throughput to deliver considerable value in hit-to-lead and lead optimization efforts. Here, we present an overview of current RBFE implementations, highlighting recent advances and remaining challenges, along with examples that emphasize practical considerations for obtaining reliable RBFE results. We focus specifically on relative binding free energies because the calculations are less computationally intensive than absolute binding free energy (ABFE) calculations and map directly onto the hit-to-lead and lead optimization processes, where the prediction of relative binding energies between a reference molecule and new ideas (virtual molecules) can be used to prioritize molecules for synthesis. We describe the critical aspects of running RBFE calculations, from both theoretical and applied perspectives, using a combination of retrospective literature examples and prospective studies from drug discovery projects. This work is intended to provide a contemporary overview of the scientific, technical, and practical issues associated with running relative binding free energy simulations, with a focus on real-world drug discovery applications. We offer guidelines for improving the accuracy of RBFE simulations, especially for challenging cases, and emphasize unresolved issues that could be improved by further research in the field.