Studies conducted over the past decade have demonstrated a central role for tumour necrosis factor alpha (TNFalpha) in inflammatory diseases. As a result of this work, a number of biological agents that neutralise the activity of this cytokine have entered the clinic. The recent clinical data obtained with etanercept and infliximab highlight the relevance of this strategy. TNFalpha converting enzyme (TACE) is the metalloproteinase that processes the 26 kDa membrane bound precursor of TNFalpha (proTNFalpha) to the 17 kDa soluble component. Although a number of proteases have been shown to process proTNFalpha, none do so with the efficiency of TACE. A series of orally bioavailable, selective, and potent TACE inhibitors are currently in clinical development. These inhibitors effectively block TACE mediated processing of proTNFalpha and can reduce TNF production by lipopolysaccharide stimulated whole blood by >95%. Through a series of studies it is shown here that >80% of the unprocessed proTNFalpha is degraded intracellularly. The remainder appears to be transiently expressed on the cell surface. Although, in vitro, TACE inhibition has also been implicated in shedding of p55 and p75 surface TNFalpha receptors, the in vivo data cast doubt on the consequences of this finding. In a mouse model of collagen-induced arthritis, the inhibitors are efficacious both prophylactically and therapeutically. The efficacy seen is equivalent to strategies that neutralise TNFalpha. In many studies greater efficacy is observed with the TACE inhibitors, presumably owing to greater penetration to the site of TNFalpha production.