Atopic diseases and asthma are increasing at a remarkable rate on a global scale. It is now well recognized that asthma is a chronic inflammatory disease of the airways. The inflammatory process in many patients is driven by an immunoglobulin E (IgE)-dependent process. Mast cell activation and release of mediators, in response to allergen and IgE, results in a cascade response, culminating in B lymphocyte, T lymphocyte, eosinophil, fibroblast, smooth muscle cell and endothelial activation. This complex cellular interaction, release of cytokines, chemokines and growth factors and inflammatory remodeling of the airways leads to chronic asthma. A subset of patients develops severe airway disease which can be extremely morbid and even fatal. While many treatments are available for asthma, it is still a chronic and incurable disease, characterized by exacerbation, hospitalizations and associated adverse effects of medications. Omalizumab is a new option for chronic asthma that acts by binding to and inhibiting the effects of IgE, thereby interfering with one aspect of the asthma cascade reviewed earlier. This is a humanized monoclonal antibody against IgE that has been shown to have many beneficial effects in asthma. Use of omalizumab may be influenced by the cost of the medication and some reported adverse effects including the rare possibility of anaphylaxis. When used in selected cases and carefully, omalizumab provides a very important tool in disease management. It has been shown to have additional effects in urticaria, angioedema, latex allergy and food allergy, but the data is limited and the indications far from clear. In addition to decreasing exacerbations, it has a steroid sparing role and hence may decrease adverse effects in some patients on high-dose glucocorticoids. Studies have shown improvement in quality of life measures in asthma following the administration of omalizumab, but the effects on pulmonary function are surprisingly small, suggesting a disconnect between pulmonary function, exacerbations and quality of life. Anaphylaxis may occur rarely with this agent and appropriate precautions have been recommended by the Food and Drug Administration (FDA). As currently practiced and as suggested by the new asthma guidelines, this biological agent is indicated in moderate or severe persistent allergic asthma (steps 5 and 6).