For nearly a century, there were no alternatives to the tuberculin skin test (TST) for diagnosing latent tuberculosis infection. Because of advances in immunology and genomics, for the first time, an alternative has emerged in the form of T cell based interferon-g (IFN-gamma) assays, a new generation of in vitro tests of cellular immunity. These assays measure cell mediated immune response by quantifying IFN-gamma released by T cells in response to stimulation by Mycobacterium tuberculosis antigens. Although early versions of IFN-gamma assays used purified protein derivative (PPD) as the stimulating antigen, newer versions use antigens that are significantly more specific to M. tuberculosis. These specific antigens include ESAT-6 and CFP-10. These proteins, encoded by genes located within the region of difference 1 (RD1) segment of the M. tuberculosis genome, are more specific to M. tuberculosis than PPD because they are not shared with any BCG substrains or several nontuberculous mycobacterial species. A review of current evidence on the performance of IFN-gamma assays and TST suggests that both the TST and IFN-gamma assays have advantages and limitations, and both tests appear to be useful at this time. The emergence of IFN-gamma assays is a much anticipated, welcome development that has, for the first time, increased the choice of tests available for diagnosing latent tuberculosis infection. Because both tests have their strengths and limitations, the decision to select one over the other will depend on the population, the goal of testing, and the resources available. To fully evaluate the utility of IFN-gamma assays in high burden countries such as India, long-term cohort studies are needed to determine the association between positive IFN-gamma results and the subsequent risk of active disease.