Intravenous immune globulin (IVIG) exhibits a number of immunomodulatory properties that are mediated by the Fe portion of IgG and by the spectrum of variable (V) regions contained in the immune globulin preparations. Five predominant and non‐exclusive mechanisms of action have been proposed to account for the immunomodulatory effects of IVIG in immune‐mediated diseases: (i) functional blockade of Fe receptors on splenic macrophages: (ii) inhibition of complement‐mediated damage, an effect that is dependent on the ability of IgG to bind C3b and C4b and thus reduce the number of activated complement fragments that may deposit on target surfaces of complement activation: (iii) modulation of the production of cytokines and cytokine antagonists: (iv) neutralization of circulating autoantibodies by complementary (e.g. anti‐idiotypic) antibodies in IVIG, a mechanism that accounts for the rapid decrease in titre of circulating autoantibodies that is often observed within hours following the infusion of IVIG: (v) selection of immune repertoires, a complex set of effects that may be observed in individuals receiving IVIG far beyond the half‐life of the infused immunoglobulin and that is directly relevant to the ability of IVIG to, for example, suppress autoantibody‐producing clones in patients with antibody‐mediated autoimmune disease and modulate graft versus host disease (GVHD). IVIG has been shown to downrcgulate or activate B‐cell clones expressing surface IgG that is complementary (anti‐idiotypic) to V regions of antibodies present in IVIG. IVIG has been shown also to interact with surface molecules of T cells that are essential to immune regulation, such as the αβ TCR, CD5, CD4, non‐polymorphic determinants of MHC class I molecules and adhesion molecules of T and B cells. The complex interactions of IVIG with functional molecules of cells of the immune system are relevant to its therapeutic effects in T cell‐ as well as B cell‐ mediated diseases and indeed, to our understanding of the physiological role of normal IgG and antibody networks in controlling autoreactivity in healthy individuals.