A review on the distribution and biological effects of carnosine and a hypothesis for its biological mechanisms of action are presented. Carnosine and its structural and functional relative, anserine, were found in skeletal muscles at the beginning of the century. Their effects on muscle-working capacity, on the stability of membrane-bound enzymes, as well as their potent immunomodulating property, could not be explained by their pH-buffering capacity or formation of the secondary metabolites histidine and beta-alanine alone. This article suggests that the basis for the biological activities of carnosine and relative compounds is their potent antioxidant and membrane-protecting activity. The plausible chemical mechanism of this activity is discussed, and data regarding the usage of carnosine as a drug for treatment of immunodeficiency are summarized.