Over the past decade, since it was first observed in vivo, there has been an explosion in interest in the thin (approximately 500 nm), gel-like endothelial glycocalyx layer (EGL) that coats the luminal surface of blood vessels. In this review, we examine the mechanical and biochemical properties of the EGL and the latest studies on the interactions of this layer with red and white blood cells. This includes its deformation owing to fluid shear stress, its penetration by leukocyte microvilli, and its restorative response after the passage of a white cell in a tightly fitting capillary. We also examine recently discovered functions of the EGL in modulating the oncotic forces that regulate the exchange of water in microvessels and the role of the EGL in transducing fluid shear stress into the intracellular cytoskeleton of endothelial cells, in the initiation of intracellular signaling, and in the inflammatory response.