Some time ago, the Th2 cytokine, interleukin (IL)-13, was identified as a critical regulator of the allergic response. Initial studies in animal models of disease provided compelling evidence that IL-13, independent from other Th2 cytokines, was necessary and sufficient to induce all features of allergic asthma. This contention was supported in human disease when strong associations between IL-13 levels and genetic polymorphisms in the IL-13 gene and disease correlates were found. With the preponderance of evidence continuing to support the importance of IL-13 in allergic disorders, attention is now turned towards understanding the mechanisms by which this cytokine may mediate the pathophysiologic features of allergic disease. The emerging paradigm is that IL-13 induces features of the allergic response via its actions on epithelial and smooth muscle cells not through traditional effector pathways involving eosinophils and IgE-mediated events. In light of recent developments, this review will explore our current understanding of the role of IL-13 in the pathogenesis of allergy and asthma with a particular focus on new insights into the mechanisms by which IL-13 induces the features of asthma.