The observation that oligodeoxynucleotides containing CpG dinucleotides (CpG DNA) exhibit several immunological effects has led to their use as therapeutic agents and adjuvants for various diseases. Several CpG DNA drug candidates are currently being evaluated, either as monotherapies or as adjuvants (with vaccines, antibodies, antigens and allergens), in preclinical and clinical trials against cancers, viral and bacterial infections, allergies and asthma. Knowledge gained from studies of the medicinal chemistry of CpG DNA has provided a basis for designing a second generation of CpG DNA agents with desirable cytokine-inducing and potent immunomodulatory activity. This article reviews recent progress in understanding the effects of CpG DNA, the medicinal chemistry of CpG DNA, and its possible therapeutic applications.