Activation-induced cell death (AICD) is the process by which cells undergo apoptosis in a controlled manner through the interaction of a death factor and its receptor. Programmed cell death can be induced by a number of physiological and pathological factors including Fas (CD95)-Fas ligand (FasL/CD95L) interaction, tumour necrosis factor (TNF), ceramide, and reactive oxygen species (ROS). Fas is a 48-kDa type I transmembrane protein that belongs to the TNF/nerve growth factor receptor superfamily. FasL is a 40-kDa type II transmembrane protein that belongs to the TNF superfamily. The interaction of Fas with FasL results in a series of signal transductions which initiate apoptosis. The induction of apoptosis in this manner is termed AICD. Activation-induced cell death and Fas-FasL interactions have been shown to play significant roles in immune system homeostasis. In this review the involvement of Fas and Fas ligand in cell death, with particular reference to the T cell, and the mechanism(s) by which they induce cell death is described. The role of AICD in immune system homeostasis and the controversy surrounding the role of FasL in immune privilege, inflammation, and so-called tumour counterattack is also discussed.