Phosphodiesterase (PDE) enzymes are responsible for the inactiviation of cyclic adenosine monophosphate (cAMP) and cyclic guanosine monophosphate (cGMP). Phosphodiesterase 4 (PDE4) is a cAMP specific phosphodiesterase expressed in inflammatory cells such as eosinophils. Inhibition of PDE4 results in an elevation of cAMP in these cells, which in turn downregulates the inflammatory response. The anti-inflammatory effects of PDE4 inhibitors have been well documented both in vitro and in vivo in a range of animal models. The potential use of PDE4 inhibitors as anti-inflammatory agents for the treatment of diseases such as asthma, chronic obstructive pulmonary disease (COPD) and multiple sclerosis (MS), has received considerable attention from the pharmaceutical industry but to date, there are no selective PDE4 inhibitors on the market. Early PDE4 inhibitors, such as rolipram suffered from dose limiting side effects, including nausea and emesis, which severely restricted their therapeutic utility. Second generation compounds such as cilomilast have been identified with reduced side effect liability. Indeed, cilomilast is showing good therapeutic effects in clinical trials for asthma and COPD and represents the most advanced selective PDE4 inhibitor for any indication. The utility of this class of inhibitor in other inflammatory diseases is less well advanced. However, data in animal models of rheumatoid arthritis (RA) and MS suggests that there is also significant potential for PDE4 inhibitors as treatments for these diseases and the results of clinical trials in these disease areas are eagerly awaited.