Capsule endoscopy (CE)--about the size of a vitamin pill--has enormous potential for the noninvasive investigation of diseases of the small bowel--"the last frontier" of endoscopy. Its use is spreading rapidly-over 150,000 capsules have been ingested worldwide since CE was introduced in 2001--reflecting the enormous impact of CE on the field of gastroenterology. CE has a higher diagnostic yield in recognizing Crohn's disease than any other method available. CE is able to establish a diagnosis in a high proportion of patients with obscure gastrointestinal bleeding, detecting small bowel lesions. New indications and applications of CE are emerging: CE has proven useful in the diagnosis of celiac disease, NSAID enteropathy and small bowel malignancies, its use in pediatric gastroenterology, the new Pill Cam ESO specifically-designed to visualize the esophageal mucosa etc. The objectives of this article are to present an overview of the CE: its history and development, indications, contraindications, and CE role in the diagnosis of small bowel diseases. Finally, it is presented the experience with CE at our institutions.