For more than two decades, immunologists have been using the so-called Th1/Th2 paradigm to explain most of the phenomena related to adaptive immunity. The Th1/Th2 paradigm implied the existence of two different, mutually regulated, CD4(+) T helper subsets: Th1 cells, driving cell-mediated immune responses involved in tissue damage and fighting infection against intracellular parasites; and Th2 cells that mediate IgE production and are particularly involved in eosinophilic inflammation, allergy and clearance of helminthic infections. A third member of the T helper set, IL-17-producing CD4(+) T cells, now called Th17 cells, was recently described as a distinct lineage that does not share developmental pathways with either Th1 or Th2 cells. The Th17 subset has been linked to autoimmune disorders, being able to produce IL-17, IL-17F and IL-21 among other inflammatory cytokines. Interestingly, it has been reported that there is not only a cross-regulation among Th1, Th2 and Th17 effector cells but there is also a dichotomy in the generation of Th17 and T regulatory cells. Therefore, Treg and Th17 effector cells arise in a mutually exclusive fashion, depending on whether they are activated in the presence of TGF-beta or TGF-beta plus inflammatory cytokines such as IL-6. This review will address the discovery of the Th17 cells, and recent progress on their development and regulation.