Exposure to diesel exhaust particles (DEP) is an environmental and occupational health concern. This review examines the cellular actions of the organic and the particulate components of DEP in the development of various lung diseases. Both the organic and the particulate components cause oxidant lung injury. The particulate component is known to induce alveolar epithelial damage, alter thiol levels in alveolar macrophages (AM) and lymphocytes, and activate AM in the production of reactive oxygen species (ROS) and pro-inflammatory cytokines. The organic component, on the other hand, is shown to generate intracellular ROS, leading to a variety of cellular responses including apoptosis. There are a number of differences between the biological actions exerted by these two components. The organic component is responsible for DEP induction of cytochrome P450 family 1 enzymes that are critical to the polycyclic aromatic hydrocarbons (PAH) and nitro-PAH metabolism in the lung as well as in the liver. The particulate component, on the other hand, causes a sustained down-regulation of CYP2B1 in the rat lung. The significance of this effect on pulmonary metabolism of xenobiotics and endobiotics remains to be seen, but may prove to be an important factor governing the interplay of the pulmonary metabolic and inflammatory systems. Long-term exposures to various particles including DEP, carbon black (CB), TiO2, and washed DEP devoid of the organic content, have been shown to produce similar tumorigenic responses in rodents. There is a lack of correlation between tumor development and DEP chemical-derived DNA adduct formation. But the organic component has been shown to generate ROS that produce 8-hydroxydeoxyguanosine (8-OHdG) in cell culture. The organic, but not the particulate, component of DEP suppresses the production of pro-inflammatory cytokines by AM and the development of Th1 cell-mediated immunity. The mechanism for this effect is not yet clear, but may involve the induction of heme oxygenase-1 (HO-1), a cellular genetic response to oxidative stress. Both the organic and the particulate components of DEP enhance respiratory allergic sensitization. Part of the DEP effects may be due to a depletion of glutathione in lymphocytes. The organic component, which is shown to induce IL-4 and IL-10 productions, may skew the immunity toward Th2 response, whereas the particulate component may stimulate both the Th1 and Th2 responses. In conclusion, the literature shows that the particulate and organic components of DEP exhibit different biological actions but both involve the induction of cellular oxidative stress. Together, these effects inhibit cell-mediated immunity toward infectious agents, exacerbate respiratory allergy, cause DNA damage, and under long-term exposure, induce the development of lung tumors.