Alveolar echinococcosis (AE) is a parasitic disease caused by intrahepatic growth of the larval stage of the cestode Echinococcus multilocularis. The main definitive host in Europe is the fox. The adult worms live in the fox intestine and their oncospheres are disseminated by faeces. Wolves, dogs and cats may also serve as definitive hosts. Small rodents--especially voles in Europe and small lagomorphs in Asia--are the natural intermediate hosts. The tumour-like larva is composed of multiple vesicles which produce protoscoleces, the fertile stage of the E. multilocularis metacestode. Carnivores are infected by preying on infected rodents. Like rodents, humans are intermediate hosts and are infected either by eating uncooked vegetables and berries contaminated by faeces of infected carnivores, or by touching such animals. Humans are naturally resistant to metacestode development. Genetic characteristics are involved in susceptibility/resistance to E. multilocularis metacestodes. In humans and other intermediate animal hosts, immune suppression enhances parasite growth, which is normally controlled by cytotoxic mechanisms and delayed-type hypersensitivity. Tolerance of E. multilocularis is due in part to parasite characteristics (especially carbohydrate antigens of the laminated layer) and in part to the "anti-inflammatory/tolerogenic" cytokines IL-10 and TGF-beta. Treatment with interferon-a restores a cytokine balance favorable to the host and might be a new therapeutic option for AE patients. Vaccination is a scientifically sound but economically and politically Utopian means of preventing the disease. Prevention thus relies on simple lifestyle measures: cooking potentially contaminated food, regular treatment of domestic animals with praziquantel, and precautions when touching potentially infected definitive hosts (foxes and dogs).