Caspofungin (Cancidas, Merck & Co. Inc.) is the first echinocandin antifungal agent to gain FDA-approval for use in the US. It has excellent clinical activity against Candida spp. and Aspergillus spp. but lacks significant activity against Cryptococcus neoformans. Caspofungin may have some activity against dimorphic fungi such as Histoplasma capsulatum and Coccidioides immitis, but no clinical data is available for treatment of these infections. Caspofungin has demonstrated poor activity against most filamentous fungi in vitro. Several clinical trials have demonstrated its efficacy in the treatment of oropharyngeal, oesophageal and invasive candidiasis, as well as invasive aspergillosis. As a result of caspofungin's unique mechanism of action, and the high morbidity and mortality of invasive fungal infections, there is considerable interest in using this new antifungal agent as part of a combination antifungal therapy. In vitro studies and small case series indicate that caspofungin does not appear to be antagonistic when combined with other antifungals, such as itraconazole, voriconazole or amphotericin B against Aspergillus spp. Caspofungin exerts concentration-dependent killing effects in many different in vitro and animal models of disseminated fungal infection. The usual daily dose is 50 mg/day i.v. following a 70 mg i.v. loading dose. However, higher caspofungin doses have been safely administered and up to 70 mg/day can be administered for patients who fail to respond to lower doses. Caspofungin has an excellent safety profile with reduced toxicities, compared to other licensed antifungal agents. Fever, thrombophlebitis, headache and liver enzyme elevations were the most common drug-related side effects reported in clinical trials so far. Additional data are needed to document its safety in long-term use, and with higher doses in patients with invasive fungal infections. Caspofungin is a promising agent as first-line therapy for invasive candidiasis, and as salvage therapy for invasive aspergillosis. However, more clinical data are needed to define its role as primary therapy for invasive aspergillosis, and its role in combination antifungal therapy.