Diphtheria is one of the most well studied of all the bacterial infectious diseases. These milestone studies of toxigenic Corynebacterium diphtheriae along with its primary virulence determinant, diphtheria toxin, have established the paradigm for the study of other related bacterial protein toxins. This review highlights those studies that have contributed to our current understanding of the structure-function relationships of diphtheria toxin, the molecular mechanism of its entry into the eukaryotic cell cytosol, the regulation of diphtheria tox expression by holo-DtxR, and the molecular basis of transition metal ion activation of apo-DtxR itself. These seminal studies have laid the foundation for the protein engineering of diphtheria toxin and the development of highly potent eukaryotic cell-surface receptor-targeted fusion protein toxins for the treatment of human diseases that range from T cell malignancies to steroid-resistant graft-versus-host disease to metastatic melanoma. This deeper scientific understanding of diphtheria toxin and the regulation of its expression have metamorphosed the third-most-potent bacterial toxin known into a life-saving targeted protein therapeutic, thereby at least partially fulfilling Paul Erlich's concept of a magic bullet-"a chemical that binds to and specifically kills microbes or tumor cells."