Multiple sclerosis (MS) is a chronic autoimmune disease of the CNS. Currently, six medications are approved for immunmodulatory and immunosuppressive treatment of the relapsing disease course and secondary-progressive MS. In the first part of this review, the pathogenesis of MS and its current treatment options are discussed. During the last decade, our understanding of autoimmunity and the pathogenesis of MS has advanced substantially. This has led to the development of a number of compounds, several of which are currently undergoing clinical testing in phase II and III studies. While current treatment options are only available for parenteral administration, several oral compounds are now in clinical trials, including the immunosuppressive agents cladribine and laquinimod. A novel mode of action has been described for fingolimod, another orally available agent, which inhibits egress of activated lymphocytes from draining lymph nodes. Dimethylfumarate exhibits immunomodulatory as well as immunosuppressive activity when given orally. All of these compounds have successfully shown efficacy, at least in regards to the surrogate marker contrast-enhancing lesions on magnetic resonance imaging. Another class of agents that is highlighted in this review are biological agents, namely monoclonal antibodies (mAb) and recombinant fusion proteins. The humanized mAb daclizumab inhibits T-lymphocyte activation via blockade of the interleukin-2 receptor. Alemtuzumab and rituximab deplete leukocytes and B cells, respectively; the fusion protein atacicept inhibits specific B-cell growth factors resulting in reductions in B-cells and plasma cells. These compounds are currently being tested in phase II and III studies in patients with relapsing MS. The concept of neuro-protection and -regeneration has not advanced to a level where specific compounds have entered clinical testing. However, several agents approved for conditions other than MS are highlighted. Finally, with the advent of these highly potent novel therapies, rare, but potentially serious adverse effects have been noted, namely infections and malignancies. These are critically reviewed and put into perspective.