Phthalimide analogues have been extensively used in medicinal chemistry owing to their wide range of applications as anti-convulsant, anti-inflammatory, analgesic, hypolipidimic and immunomodulatory activities. Number of anti-inflammatory phthalimide analogues have been synthesized as tumor necrosis factor-α (TNF-α) inhibitors. TNF-α plays a critical role in certain physiological immune systems and its over-production causes severe damage to the host. It promotes the inflammatory response leading to many of the clinical problems associated with auto-immune disorders like rheumatoid arthritis, Crohns disease, ankylosing spondylitis, psoriasis and refractory asthma. One of the phthalimide derivatives, LASSBio-468, was recently demonstrated to inhibit TNF-α production induced by lipopolysaccharide (LPS), in vivo. Its potential against chronic inflammatory diseases was also witnessed. Another derivative, DIMP, showed good anti-androgenic activity. These analogues have also been employed for the synthesis of several kinds of important therapeutic synthones. However extensive research on the chemistry and biological activities of phthalimide analogues has been carried out and number of reports appeared, a compilation focusing on chemistry and biological activity is still needed. This review, concisely describes the chemical and therapeutic aspects of phthalimide derivatives.