Treatment for multiple sclerosis (MS), a chronic disease of the central nervous system, has historically relied exclusively on the use of injectable therapies. As the disease requires lifelong therapy, the development of oral therapies that are safe and effective would provide a more convenient dosage form that may improve patient compliance. One oral medication (fingolimod) was recently approved for treatment of MS. Teriflunomide, an immunomodulator, is one of four oral therapies currently undergoing Phase III trials. Teriflunomide exerts its clinical effects via selective inhibition of de novo pyrimidine synthesis, primarily targeting proliferating T and B lymphocytes in the periphery. Teriflunomide was effective as monotherapy in reducing magnetic resonance imaging lesions and annual relapse rates in Phase II and Phase III trials. When teriflunomide was added to interferon or glatiramer acetate therapy in Phase II trials, teriflunomide reduced magnetic resonance imaging lesions significantly more than either interferon or glatiramer acetate alone. Treatment-emergent adverse events occurred at similar rates among all groups in teriflunomide studies, with a trend towards a higher treatment emergent adverse events rate in the higher dosage group of teriflunomide (14 mg daily). Treatment discontinuations in teriflunomide trials were relatively low, suggesting that teriflunomide monotherapy is well tolerated. This article reviews the mode of action of teriflunomide, its pharmacokinetic, clinical efficacy, and safety profiles.