Immunomodulatory biologics, which render their therapeutic effects by modulating or harnessing immune responses, have proven their therapeutic utility in several complex conditions including cancer and autoimmune diseases. However, unwanted adverse reactions--including serious infections, malignancy, cytokine release syndrome, anaphylaxis and hypersensitivity as well as immunogenicity--pose a challenge to the development of new (and safer) immunomodulatory biologics. In this article, we assess the safety issues associated with immunomodulatory biologics and discuss the current approaches for predicting and mitigating adverse reactions associated with their use. We also outline how these approaches can inform the development of safer immunomodulatory biologics.