The intestinal microbiota plays a fundamental role in maintaining immune homeostasis. In controlled clinical trials probiotic bacteria have demonstrated a benefit in treating gastrointestinal diseases, including infectious diarrhea in children, recurrent Clostridium difficile-induced infection, and some inflammatory bowel diseases. This evidence has led to the proof of principle that probiotic bacteria can be used as a therapeutic strategy to ameliorate human diseases. The precise mechanisms influencing the crosstalk between the microbe and the host remain unclear but there is growing evidence to suggest that the functioning of the immune system at both a systemic and a mucosal level can be modulated by bacteria in the gut. Recent compelling evidence has demonstrated that manipulating the microbiota can influence the host. Several new mechanisms by which probiotics exert their beneficial effects have been identified and it is now clear that significant differences exist between different probiotic bacterial species and strains; organisms need to be selected in a more rational manner to treat disease. Mechanisms contributing to altered immune function in vivo induced by probiotic bacteria may include modulation of the microbiota itself, improved barrier function with consequent reduction in immune exposure to microbiota, and direct effects of bacteria on different epithelial and immune cell types. These effects are discussed with an emphasis on those organisms that have been used to treat human inflammatory bowel diseases in controlled clinical trials.