Idiopathic pulmonary fibrosis (IPF), also termed cryptogenic fibrosing alveolitis, is a clinicopathological syndrome characterised by cough, exertional dyspneoa, basilar crackles, a restrictive defect on pulmonary function tests, honeycombing on high-resolution, thin-section computed tomographic scans and the histological diagnosis of usual interstitial pneumonia on lung biopsy. The course is usually indolent but inexorable. Most patients die of progressive respiratory failure within 3-8 years of the onset of symptoms. Current therapies are of unproven benefit. Although the pathogenesis of IPF has not been elucidated, early concepts focused on lung injury leading to a cycle of chronic alveolar inflammation eventuating in fibrosis and destruction of the lung architecture. Anti-inflammatory therapies employing corticosteroids or immunosuppressive or cytotoxic agents have been disappointing. More recent hypotheses acknowledge that sequential alveolar epithelial cell injury is likely to be a key event in the pathogenesis of IPF, but the cardinal event is an aberrant host response to wound healing. In this context, abnormal epithelial-mesenchymal interactions, altered fibroblast phenotypes, exaggerated fibroblast proliferation, and excessive deposition of collagen and extracellular matrix are pivotal to the fibrotic process. Several clinical trials are currently underway or in the planning stages, and include drugs such as interferon-gamma 1b, pirfenidone, acetylcysteine, etanercept (a tumor necrosis factor-alpha antagonist), bosentan (an endothelin-1 receptor antagonist) and zileuton (a 5-lypoxygenase inhibitor). Future therapeutic strategies should be focused on alveolar epithelial cells aimed at enhancing re-epithelialisation and on fibroblastic/myofibroblastic foci, which play an essential role in the development of IPF. Stem cell progenitors of the alveolar epithelial cells and genetic and epigenetic therapies are attractive future approaches for this and other fibrotic lung disorders.