Psoriasis is a frequent, chronic, clinically variable inflammatory disease of unknown etiology, affecting primarily the skin and the joints. A cure for the disease is still missing, and due to the chronic course of the disease, currently available treatments are associated with serious morbidity. Psoriasis is considered to be an (auto)immune disorder, probably initiated by the overactive skin innate immune system, and maintained by immigrating activated type 1 T cells and abnormally proliferating and differentiating keratinocytes. A complex network of cytokines and chemokines mediates the pathological reaction, whereas the abnormal function of psoriatic regulatory T cells is likely responsible for the chronic nature of psoriasis. The most important clinical, histological, and pathogenic characteristics of psoriasis are discussed, and an overview of traditional and novel therapeutic modalities is provided. Based on recently obtained evidence from animal disease models and clinical studies using biological drugs with selective immunological action, a complex model for the immunopathogenesis of psoriasis is outlined. Advances in understanding the immunology of psoriasis have not only provided more insights into the cause and development of the disease, but gave new therapeutic tools into the hands of clinicians to more selectively and (possibly) more effectively treat psoriasis.