The inflammatory bowel diseases (IBDs), Crohn's disease and ulcerative colitis, are chronic inflammatory disorders of the gastrointestinal tract. Enormous progress has been made recently in understanding the pathogenesis of these diseases. Through the study of patients and mouse models, it has emerged that Crohn's disease is driven by the production of interleukin-12 (IL-12) and interferon-γ (IFN-γ), whereas ulcerative colitis is probably driven by the production of IL-13. A second area of progress is in the identification of specific genetic abnormalities that are responsible for disease. The most important finding is the identification of mutations in the gene that encodes NOD2 (nucleotide-binding oligomerization domain 2) protein in a subgroup of patients with Crohn's disease. Here, we discuss these recent findings and the implications for therapy.