Cathelicidins are host defense peptides with antimicrobial and immunomodulatory functions. These effector molecules of the innate immune system of many vertebrates are diverse in their amino acid sequence but share physicochemical characteristics like positive charge and amphipathicity. Besides being antimicrobial, cathelicidins have a wide variety in immunomodulatory functions, both boosting and inhibiting inflammation, directing chemotaxis, and effecting cell differentiation, primarily towards type 1 immune responses. In this review, we will examine the biology and various functions of cathelicidins, focusing on putting in vitro results in the context of in vivo situations. The pro-inflammatory and anti-inflammatory functions are highlighted, as well both direct and indirect effects on chemotaxis and cell differentiation. Additionally, we will discuss the potential and limitations of using cathelicidins as immunomodulatory or antimicrobial drugs.