The P2X7 receptor is an ATP-gated cation channel that is widely expressed in cells of the immune system. Signal transduction is accompanied by fast influx of Ca2+ and Na+, and efflux of K+. This receptor differs from other members of the P2X family in its relatively low affinity for ATP, the presence of a long C-terminal region that contains several protein-protein interaction motifs, and the activation of two membrane conductance states following receptor ligation. In the immune system, this receptor has been implicated in the processing and release of cytokines such as IL-1 beta, and in the initiation of cell death via both apoptotic and necrotic pathways. As such, it has been proposed to function as a major regulator of inflammation. Consistent with this hypothesis, inactivation of this receptor in mice modulates disease pathogenesis in several animal models of inflammatory and autoimmune diseases. Loss-of-function polymorphisms have also been noted in the human population, and there is accumulating evidence that these polymorphisms are linked to certain diseases. In this article, we review the current status of research in this field, with particular emphasis on the signaling pathways activated by this receptor, the mechanisms involved in the initiation of cell death, and associations with disease states in mice and humans.