Theophylline has now been in clinical use, most notably in the treatment of respiratory disease, for more than a century. Traditionally classified as a bronchodilator drug, it is becoming increasingly apparent that theophylline has a range of other pharmacological effects of potential therapeutic value in the treatment of respiratory diseases. Anti-inflammatory and immunomodulatory actions of theophylline have been observed both in the laboratory with respect to inflammatory cell function and in the clinic in patient populations suffering with a range of respiratory diseases. Many of the biological effects of theophylline have been suggested to occur via an inhibitory effect on the phosphodiesterase (PDE) family of enzymes; however, studies have also shown theophylline to antagonise adenosine receptors, inhibit NF-kB, a transcription factor important in regulation of inflammatory cell cytokine activity, inhibit interleukin (IL)-5 or granulocyte-macrophage colony-stimulating factor (GM-CSF)-induced eosinophil survival, enhance histone deacetylase (HDAC) activity and affect lipid kinase and protein kinase activities in inflammatory cells. Research will no doubt continue in order to elucidate these mechanisms in an attempt to produce a theophylline-type drug with greater selectivity and higher therapeutic index, which in turn may lead to improved patient compliance and greater control of airway inflammation.