Microfluidics-based biochips enable the precise control of nanoliter volumes of biochemical samples and reagents. They combine electronics with biology, and they integrate various bioassay operations, such as sample preparation, analysis, separation, and detection. Compared to conventional laboratory procedures, which are cumbersome and expensive, miniaturized biochips offer the advantages of higher sensitivity, lower cost due to smaller sample and reagent volumes, system integration, and less likelihood of human error. This paper first describes the droplet-based “digital” microfluidic technology platform and emerging applications. The physical principles underlying droplet actuation are next described. Finally, the paper presents computer-aided design tools for simulation, synthesis and chip optimization. These tools target modeling and simulation, scheduling, module placement, droplet routing, pin-constrained chip design, and testing.