Varicella-zoster virus (VZV) is the etiologic agent of varicella (primary infection) and herpes zoster (reactivation of latent infection). Although varicella is most often a relatively benign and self-limited childhood illness, the disease can be associated with a variety of serious and potentially lethal complications in both immunocompetent and immunocompromised persons. One complication of varicella that appears to be increasing in frequency is serious bacterial soft tissue infections caused by group A streptococci. Issues related to management of varicella become especially complex when varicella involves pregnant women or susceptible neonates. Herpes zoster can be associated with a variety of neurologic complications, including a syndrome of delayed contralateral hemiparesis. Neurologic complications of herpes zoster, including chronic encephalitis, occur with increased frequency in AIDS patients. VZV retinitis is a potentially sight-threatening complication that occurs in both immunocompetent and immunocompromised persons. Current knowledge regarding pathogenesis and antiviral therapy is reviewed.