Laquinimod is a novel, small, orally administered medication that has demonstrated efficacy in the treatment of multiple sclerosis, a chronic inflammatory demyelinating disease of the CNS. In preclinical testing, laquinimod inhibited the development of both acute and chronic paralysis in the multiple sclerosis model, experimental autoimmune encephalomyelitis. Furthermore, laquinimod reduced inflammation, demyelination and axonal damage in experimental autoimmune encephalomyelitis in mice treated at disease induction or at clinical disease onset. Recent findings from the clinical trials indicate that laquinimod has significant effects in reducing relapse rate and has more pronounced effects in reducing sustained disability progression as well as brain atrophy, with a good safety profile. In conclusion, preclinical studies show that laquinimod's unique mechanisms of action, including its immunomodulatory and CNS-protective effects, translate into clinical benefits in relapsing-remitting multiple sclerosis patients.