The number of near-infrared (NIR) spectroscopic applications in the pharmaceutical sciences has grown significantly in the last decade. Despite its widespread application, the fundamental interaction between NIR radiation and pharmaceutical materials is often not mechanistically well understood. Separation of absorption and scattering in near-infrared spectroscopy (NIRS) is intended to extract absorption and scattering spectra (i.e., absorption and reduced scattering coefficients) from reflectance/transmittance NIR measurements. The purpose of the separation is twofold: (1) to enhance the understanding of the individual roles played by absorption and scattering in NIRS and (2) to apply the separated absorption and scattering spectra for practical spectroscopic analyses. This review paper surveys the multiple techniques reported to date on the separation of NIR absorption and scattering within pharmaceutical applications, focusing on the instrumentations, mathematical approaches used to separate absorption and scattering and related pharmaceutical applications. This literature review is expected to enhance the understanding and thereby the utility of NIRS in pharmaceutical science. Further, the measurement and subsequent understanding of the separation of absorption and scattering is expected to increase not only the number of NIRS applications, but also their robustness.