To review the current literature in reference to the pathophysiology, diagnosis, and treatment of pyothorax in dogs and cats. Pyothorax, also known as thoracic empyema, is characterized by the accumulation of septic purulent fluid within the pleural space. While the actual route of pleural infection often remains unknown, the oral cavity and upper respiratory tract appear to be the most common source of microorganisms causing pyothorax in dogs and cats. In human medicine, pyothorax is a common clinical entity associated with bacterial pneumonia and progressive parapneumonic effusion. Thoracic imaging can be used to support a diagnosis of pleural effusion, but cytologic examination or bacterial culture of pleural fluid are necessary for a definitive diagnosis of pyothorax. The approach to treatment for pyothorax varies greatly in both human and veterinary medicine and remains controversial. Treatment of pyothorax has classically been divided into medical or surgical therapy and may include administration of antimicrobials, intermittent or continuous thoracic drainage, thoracic lavage, intrapleural fibrinolytic therapy, video-assisted thoracic surgery, and traditional thoracostomy. Despite all of the available options, the optimal treatment to ensure successful short- and long-term outcome, including the avoidance of recurrence, remains unknown. The prognosis for canine and feline pyothorax is variable but can be good with appropriate treatment. A review of the current veterinary literature revealed an overall reported survival rate of 83% in dogs and 62% in cats. As the clinical presentation of pyothorax in small animals is often delayed and nonspecific, rapid diagnosis and treatment are required to ensure successful outcome.