The alpha-2 agonist dexmedetomidine is being increasingly used for sedation and as an adjunctive agent during general and regional anesthesia. It is used in a number of procedures and clinical settings including neuroanesthesia, vascular surgery, gastrointestinal endoscopy, fiberoptic intubation, and pediatric anesthesia. The drug is also considered a nearly ideal sedative agent in the intensive care setting. However, the drug frequently produces hypotension and bradycardia, and also decreases cerebral blood flow without concomitantly decreasing the cerebral metabolic rate for oxygen. This review discusses recent advances in the use of dexmedetomidine in anesthesia and intensive care settings, as well as discuss potential problems with its use.