Transverse myelitis is a focal inflammatory disorder of the spinal cord which may arise due to different etiologies. Transverse myelitis may be idiopathic or related/secondary to other diseases including infections, connective tissue disorders and other autoimmune diseases. It may be also associated with optic neuritis (neuromyelitis optica), which may precede transverse myelitis. In this manuscript we review the pathophysiology of different types of transverse myelitis and neuromyelitis optica and discuss diagnostic criteria for idiopathic transverse myelitis and risk of development of multiple sclerosis after an episode of transverse myelitis. We also discuss treatment options including corticosteroids, immunosuppressives and monoclonal antibodies, plasma exchange and intravenous immunoglobulins.