Erythromycin was first isolated in the 1950s from a Philippine soil sample, and the derivatives of erythromycin A, called the macrolide antibiotics, have been used as effective antibacterial agents ever since. It has long been suspected that the 14-membered macrolides have immunomodulatory activity as demonstrated by their early use as adjunctive therapy for asthma and their astounding effectiveness for the therapy of diffuse panbronchiolitis. It is now clear, that the macrolides and their cousins, the 15-membered azalides, and perhaps the ketolides, have a broad range of biological response modifying effects on inflammation, tumor cells, airway secretions and host defenses. This review highlights some exciting new data, as well as controversies related to understanding the mechanism of action for these diverse effects.