The incidence of allergic diseases is increasing to epidemic proportions both in the developed and developing world with increasing medical costs and lost productivity. The discovery of immunoglobulin (Ig) E heralded a new era in pathophysiological understanding of allergic disorders. Twenty-five years later, a humanised, non-anaphylactogenic antibody was developed against IgE that could provide a therapeutic alternative to the existing medications. RhuMAb-E25 (omalizumab, Xolair, Genetech, Inc.) is a novel anti-IgE antibody that is directed against the receptor-binding domain of IgE. This binding is specific towards free IgE thereby preventing it from attaching to the mast cell and its subsequent activation. Initial studies demonstrated attenuation of the early and late asthmatic responses when anti-IgE was administered to asthmatic subjects. Later this novel molecule was found to improve symptom scores, rescue medication use, quality of life scores and peak expiratory flows in patients with allergic asthma. Most importantly, omalizumab treatment reduced the corticosteroid use in asthmatic individuals. In patients with seasonal allergic rhinitis, there was a significant reduction in the nasal and ocular symptoms as well as the use of rescue medications. Omalizumab also demonstrated a high level of safety in adults, adolescents and children with a side effect profile no different from the placebo. Its development is an exciting milestone in the treatment of allergic diseases.