Acute transverse myelitis (ATM) is a rare, immune-mediated pathology that is defined as an adverse inflammatory response in the spinal cord leading to neurologic injury. The pathophysiology of ATM is poorly understood, with no apparent differences in age, ethnicities, or race, along with variable radiographic and clinical presentation. Therefore, in this review, we will characterize what is known about ATM’s etiology and diagnostic criteria, and relate it to properties of neuroimmunology. Moreover, we will further discuss current treatment options, along with potential novel methods, to provide a comprehensive overview of the status of ATM’s research development. Among these novel treatments, potassium blockers reveal exciting early outcomes in restoring neurologic motor function. In addition, human glial progenitor cell transportations have been described as a potential treatment through integrating and remyelinating lesion sites. Nevertheless, despite these novel methods, there is a paucity of clinical trials establishing ATM’s immunopathology and the therapeutic role of potential treatment methods. Therefore, we will highlight the importance of larger well-designed clinical trials in revealing significant biomarkers of injury and recovery.