Primary sclerosing cholangitis (PSC) is a chronic cholestatic liver disease characterized by fibro-obliterative inflammation of the intra- and extrahepatic bile ducts; in 70% of cases, it is associated with inflammatory bowel disease. The disease usually runs a progressive course, ultimately leading to biliary cirrhosis, hepatic failure, and sometimes cholangiocarcinoma, with a median survival of 12 yr after diagnosis. As yet, the etiology of primary sclerosing cholangitis remains unknown, although several recent studies have implicated immunogenetic factors as important pathogenic mechanisms. Besides liver transplantation for patients with end-stage cirrhotic liver disease and endoscopic therapy for patients with dominant extrahepatic bile duct strictures, recent studies have also shown promising results of drug therapy with ursodeoxycholic acid in the treatment of PSC. The purpose of this article is to summarize our current knowledge of the immunogenetic factors in the pathogenesis of PSC and to present support for drug therapy with ursodeoxycholic acid in the treatment of PSC. The genetic and immunological factors in the pathogenesis of PSC are outlined first, followed by a rationale of drug therapy with ursodeoxycholic acid in the treatment of PSC.