Interleukin-21 (IL-21) is the newest member of the common gamma-chain family of cytokines, which includes IL-2, IL-4, IL-7, IL-9, IL-13, and IL-15. Its private receptor, IL-21R, has been shown to activate the Janus kinase/signal transducers and activators of transcription signaling pathway upon ligand binding. Initial studies have demonstrated that IL-21 has pleiotropic effects on the proliferation, differentiation, and effector functions of B, T, natural killer, and dendritic cells. More recently, the potential therapeutic capacity of IL-21 in the treatment of cancers has been widely investigated. The biological role of IL-21 in the immune system is complex, as IL-21 has been shown to have the ability to both promote and inhibit immune responses. Overall, the current data point to IL-21 being a novel immunomodulatory cytokine, whose regulation of any given immune response is highly dependent on the surrounding environmental context.