This review outlines the mechanisms underlying the interaction between the nervous and immune systems of the host in response to an immune challenge. The main focus is the cholinergic anti-inflammatory pathway, which we recently described as a novel function of the efferent vagus nerve. This pathway plays a critical role in controlling the inflammatory response through interaction with peripheral a7 subunit-containing nicotinic acetylcholine receptors expressed on macrophages. We describe the modulation of systemic and local inflammation by the cholinergic anti-inflammatory pathway and its function as an interface between the brain and the immune system. The clinical implications of this novel mechanism also are discussed.