We discuss the exact renormalization group or flow equation for the effective action and its decomposition into one particle irreducible N point functions. With the help of a truncated flow equation for the four point function we study the bound state problem for scalar fields. A combination of analytic and numerical methods is proposed, which is applied to the Wick-Cutkosky model and a QCD-motivated interaction. We present results for the bound state masses and the Bethe-Salpeter wave function. (Figs. 1-4 attached as separate uuencoded post-script files.)