The view of theophylline as a second-line bronchodilator in asthma therapy has begun to be reconsidered in recent years as the details of its additional actions on airway inflammation have emerged. Increasing understanding of the mechanisms of action of theophylline has led to an appreciation of the ways in which this, and other related drugs, may influence the development and maintenance of the airway inflammation that underlies asthma through alteration of inflammatory cell function. In addition, recent demonstrations that theophylline can suppress late-phase asthmatic reactions at serum concentrations below those traditionally regarded as therapeutically useful have provided evidence that theophylline's beneficial actions in asthma extend beyond mild bronchodilation. The apparent suppression of airway inflammation by theophylline in asthmatic patients reinforces data from ill vitro experiments, showing inhibitory actions of theophylline on the pro-inflammatory functions of many immune cells. Here, we review some recent advances in the understanding of theophylline's actions that suggest its role as an anti-inflammatory drug in asthmatic airways.