INTRODUCTION Irritable bowel syndrome (IBS) is defined by symptoms of abdominal pain and altered bowel habits without detectable organic disease. Antidepressants and serotonin receptor modulators are used to treat IBS, but rare serious adverse events highlight the safety hurdle. Newer drugs with secretory and motility effects via local gut mechanisms have been successfully approved for IBS, often by registering first in a related, non-IBS condition to optimize dosing, formulation and therapeutic window. AREAS COVERED This review looks at approaches for novel IBS drug discovery. The underlying pathologies can be tackled locally from the 'outside-in' (intestinal lumen, mucosa and neuromuscular) to identify therapeutic targets. The article discusses the mechanisms associated with bile acid malabsorption, microbial dysbiosis, decreased intestinal barrier function, immune dysregulation, motility and visceral hypersensitivity. EXPERT OPINION Challenges for new drug discovery are the unknown mechanisms underlying IBS, making it difficult to predict clinically efficacious molecular targets, limited options for translational research and disease progression biomarkers. Drugs acting locally via multiple targets (e.g., eluxadoline [The U.S. Food and Drug Administration approved Viberzi (eluxadoline) for IBS-D on May 27th 2015], crofelemer) to validated mechanisms are proving successful with tolerable safety margins. Novel mechanisms, identified and optimized based on the emerging role of nutrient signaling, probiotics or microbial products, are promising. Therapeutic treatment earlier in disease progression may improve response and have longer term benefits.