Multiple sclerosis (MS) is the most common disabling neurological disease of young adulthood. Following advances in the understanding of the immunological mechanisms that underlie the pathogenesis of MS, a growing arsenal of immunomodulatory agents is available. Two classes of immunomodulators are approved for long-term treatment of MS, the efficacy of several promising new concepts is being tested in clinical trials and classical immunosuppressive agents used in MS treatment have been shown to exert specific, immunomodulatory effects. Furthermore, two recent observations have changed our basic understanding of the pathogenesis of MS. First, immune cells in MS lesions have neuroprotective activity, which indicates a beneficial role of neuroinflammation. Second, there is evidence that axonal loss, rather than demyelination, underlies the progression of MS and, hence, constitutes a therapeutic target.