Allergen-specific immunotherapy has been carried out for almost a century and remains one of the few antigen-specific treatments for inflammatory diseases. The mechanisms by which allergen-specific immunotherapy exerts its effects include the modulation of both T-cell and B-cell responses to allergen. There is a strong rationale for improving the efficacy of allergen-specific immunotherapy by reducing the incidence and severity of adverse reactions mediated by IgE. Approaches to address this problem include the use of modified allergens, novel adjuvants and alternative routes of administration. This article reviews the development of allergen-specific immunotherapy, our current understanding of its mechanisms of action and its future prospects.