Idiopathic pulmonary fibrosis (IPF) is a chronic scarring illness limited to the lung and characterized by progressive dyspnea, restrictive pulmonary physiology, and radiographic diffuse lung disease. During the past few years, significant progress has been made, particularly in diagnosis: a stricter case definition has been outlined by consensus among international experts. Insights into the pathophysiology have revealed novel areas for therapeutic intervention. These advances have helped clarify many important diagnostic and therapeutic issues in this disease. An effective treatment regimen is yet to be determined. Significant new insights in the natural course and monitoring disease course have provided use of appropriate endpoints to test the safety and efficacy of new treatment regimens. Several multicenter clinical trials are underway and several more are being planned. It is hoped that ongoing molecular genetic studies and results of clinical trials will improve outcome of patients and families affected with this disease in the near future.