Polarization of naive T cells in a certain functional direction is influenced not only by antigen type and concentration, but also by co-stimulatory signals, the local cytokine environment and transcription factors that activate or inhibit specific T cell lineage programs through positive or negative feedback loops. Interleukin-25 (IL-25) is a recently identified member of the IL-17 cytokine family. It has the ability to influence innate and adaptative immunity. Within the IL-17 family, IL-25 possesses the lowest degree of homology to IL- 17A, does not share common biological functions with other members of the IL-17 cytokine family, and instead has been been implicated in the promotion of Th2 immunity. IL-25 drives the expression of IL-4, IL-5, and IL-13, thereby contributing to allergic disease. Although our understanding of the biology of IL-25 is increasing, how IL-25 is regulated is still poor. On the other hand, recent studies have shown a novel anti-inflammatory role for IL-25 as a key factor in the attenuation of IL-17-mediated inflammation, such as in colitis, encephalomyelitis, and diabetes mellitus. Thus, IL-25 and IL-17, being members of the same cytokine family, seem to play opposing roles in the pathogenesis of autoimmune diseases. In this article, we review the dual roles of IL-25 in immune responses, the molecular basis for these effects, and the potential therapeutic implications.