The neuropeptide alpha-melanocyte-stimulating hormone (MSH) is a well-known mediator of skin pigmentation. More recently, it has been shown that MSH also exerts a strong anti-inflammatory and immuno-modulating activity. Accordingly,MSH affects several pathways implicated in regulation of inflammatory responses such as NF-κB activation, expression of adhesion molecules and chemokine receptors, production of proinflammatory cytokines and chemokines. αMSH modulates the proliferation, activity, and migration of inflammatory cells as well as programmed cell death. Moreover, αMSH induces tolerogenic dendritic cells (DC) capable of generating functional regulatory T-cells (T-reg). Interestingly, human T-reg expanded via αMSH-stimulated dendritic cells suppressed the proliferation and cytokine secretion of T helper-17 (Th17) cells from individuals with psoriasis. The anti-inflammatory and immuno-modulating effects of αMSH have been confirmed in several animal models of inflammation such as allergic contact dermatitis (CHS), inflammatory bowel disease and experimental autoimmune encephalomyelitis (EAE). The anti-inflammatory potential together with the favourable physiochemical properties of MSH derived peptides most likely will allow these agents to be developed for the treatment of inflammatory and autoimmune diseases such as psoriasis, Crohn’s disease and multiple sclerosis.