Multiple sclerosis (MS) is a debilitating neurological disorder involving autoimmune destruction of myelin. Although the pathogenic mechanisms underlying MS are not fully understood, T cells are thought to have a key role in orchestrating the aberrant CNS-directed adaptive immune response in the early and relapsing-remitting phase of disease. New therapeutic interventions with improved efficacy over existing drugs and good tolerability are needed. A promising therapy under investigation is daclizumab--a humanized monoclonal antibody directed against the IL-2 receptor α chain (CD25). Clinical trials have shown that daclizumab strongly inhibits disease activity and slows disease progression in MS. Novel and intriguing mechanisms of action of daclizumab have been identified that might explain its clinical efficacy--namely, expansion and enhancement of the immune regulatory function of CD56bright natural killer cells, reduction of early T-cell activation through blockade of IL-2 cross-presentation by dendritic cells, and reduction of lymphoid tissue inducer cells--thereby enhancing endogenous mechanisms of immune tolerance. This Review discusses the efficacy and safety of daclizumab in patients with MS and provides a detailed insight into the multifunctional mechanisms of action of this drug.