We present an exhaustive review of research on automatic classification of sounds from musical instruments. Two different but complementary approaches are examined, the perceptual approach and the taxonomic approach. The former is targeted to derive perceptual similarity functions in order to use them for timbre clustering and for searching and retrieving sounds by timbral similarity. The latter is targeted to derive indexes for labeling sounds after culture- or user-biased taxonomies. We review the relevant features that have been used in the two areas and then we present and discuss different techniques for similarity-based clustering of sounds and for classification into pre-defined instrumental categories.