This review describes the role of modulation of intracellular adhesion molecule-1 (ICAM-1)/leukocyte function-associated antigen-1 (LFA-1) interaction in controlling autoimmune diseases or inducing immunotolerance. ICAM-1/LFA-1 interaction is essential for T-cell activation as well as for migration of T-cells to target tissues. This interaction also functions, along with Signal-1, as a co-stimulatory signal (Signal-2) for T-cell activation, which is delivered by the T-cell receptors (TCR)-major histocompatibility complex (MHC)-peptide complex. Therefore, blocking ICAM-1/LFA-1 interaction can suppress T-cell activation in autoimmune diseases and organ transplantation. Many types of inhibitors (i.e. antibodies, peptides, small molecules) have been developed to block ICAM-1/LFA-1 interactions, and some of these molecules have reached clinical trials. Peptides derived from ICAM-1 and LFA-1 sequences have been shown to inhibit T-cell adhesion and activation. In addition, these inhibitors have been useful in elucidating the mechanism of ICAM-1/LFA-1 interaction. Besides binding to LFA-1, the ICAM-1 peptide can be internalized by LFA-1 receptors into the cytoplasmic domain of T-cells. Therefore, this ICAM-1 peptide can be utilized to selectively target toxic drugs to T-cells, thus avoiding harmful side effects. Finally, bi-functional inhibitory peptide (BPI), which is made by conjugating the antigenic peptide and an LFA-1 peptide, can alter the T-cell commitment from T-helper-1 (Th1) to T-helper-2 (Th2)-like cells, suggesting that this peptide may have a role in blocking the formation of the "immunological synapse."