Corneal transplantation is the most successful solid organ transplantation performed in humans. The extraordinary success of orthotopic corneal allografts, in both humans and experimental animals, is related to the phenomenon of "immune privilege". Inflammation is self-regulated to preserve ocular functions because the eye has immune privilege. At present, three major mechanisms are considered to provide immune privilege in corneal transplantation: 1) anatomical, cellular, and molecular barriers in the cornea; 2) tolerance related to anterior chamber-associated immune deviation and regulatory T cells; and 3) an immunosuppressive intraocular microenvironment. This review describes the mechanisms of immune privilege that have been elucidated from animal models of ocular inflammation, especially those involving corneal transplantation, and its relevance for the clinic. An update on molecular, cellular, and neural interactions in local and systemic immune regulation is provided. Therapeutic strategies for restoring immune privilege are also discussed.