Intravenous immunoglobulin (IVIg)-a preparation of polyclonal serum IgG pooled from thousands of blood donors-has been used for nearly three decades, and is proving to be an efficient anti-inflammatory and immunomodulatory treatment for a growing number of neurological diseases. Evidence from controlled clinical trials has established IVIg as a first-line therapy for Guillain-Barré syndrome, chronic inflammatory demyelinating polyneuropathy and multifocal motor neuropathy. IVIg is also an effective rescue therapy in some patients with worsening myasthenia gravis, and is beneficial as a second-line therapy for dermatomyositis and stiff-person syndrome. IVIg has been tested in some neurodegenerative disorders, but a controlled study in Alzheimer disease yielded disappointing results. Despite its widespread use and therapeutic success, the mechanisms of action of IVIg are poorly understood. Several hypotheses, based on the function of either the variable or constant IgG fragments, have been proposed to explain IVIg's immunomodulatory activity. This Review highlights emerging data on the mechanisms of action of IVIg related to its anti-inflammatory activity, especially that involving the cellular Fcγ receptors and Fc glycosylation. We also summarize recent trials in neurological diseases, discuss potential biomarkers of efficacy, offer practical guidelines on administration, and provide a rationale for experimental trials in neuroinflammatory disorders.