Phosphodiesterase-4 (PDE4) is an important cAMP-metabolising enzyme in immune and inflammatory cells, airway smooth muscle and pulmonary nerves. The phosphodiesterase 4 (PDE4) enzyme plays a significant role in modulating the activity of cAMP, an important second messenger that mediates the relaxation of airway smooth muscle and suppresses inflammatory cell function, thereby attenuating the inflammatory response. Selective inhibitors of this enzyme show a broad spectrum of activity in animal models of COPD and asthma. These drugs block the hydrolysis of cAMP via inhibition of PDE4 and are attractive candidates for novel anti-inflammatory drugs. At present, two second-generation PDE4 inhibitors for the treatment of COPD and asthma patients are being tested in clinical Phase III trials. The most advanced compound is the orally active, selective PDE4 inhibitor cilomilast (Ariflo, SB-207499, cis-4-cyano-4-[3-cyclopentyloxy-4-methoxyphenyl]-cyclohexanecarboxylic acid; GlaxoSmithKline). Cilomilast shows high selectivity for cAMP-specific PDE4, an isoenzyme that predominates in pro-inflammatory and immune cells and that is 10-fold more selective for PDE4D than for PDE4A, -B or -C. In vitro, cilomilast suppresses the activity of several pro-inflammatory and immune cells that have been implicated in the pathogenesis of asthma and COPD. Moreover, it is highly active in animal models of these diseases. Cilomilast has been shown to exert potent anti-inflammatory effects both in vitro and in vivo. It is orally active and may be effective in the treatment of asthma and COPD; however, complete assessment of the therapeutic value of this novel compound class must await the outcome of longer-term clinical trials. This review presents a summary of the preclinical and clinical profile of cilomilast in patients with COPD.