Capecitabine is a synthetic oral fluoropyrimidine carbamate that is sequentially activated in a three-step process, which results in the preferential production of 5-fluorouracil in tumours, rather than in the normal surrounding tissue. Capecitabine is proven to be as effective as the combination of 5-fluorouracil and leucovorin administered on the Mayo clinic schedule in patients with metastatic colorectal cancer. It has also been proven to be effective in patients with metastatic breast cancer that has progressed despite prior anthracyclines and taxoids. More recently, it has also been shown to increase survival in combination with docetaxel in patients with metastatic breast cancer in comparison to docetaxel alone. This article reviews the pharmacology and clinical activity of capecitabine, as well as combinations of capecitabine with other chemotherapeutic agents and future directions of investigation with this convenient and widely active antitumour therapy.