Dry eye conditions are prevalent with one in four to five patients presenting to eye care practitioners having dry eye signs and/or symptoms. An intimate relationship exists between the ocular surface and the tear film. The cycle of tear film instability and ocular surface damage characteristic of dry eye conditions suggests that dry eye represents a dysfunction of an integrated ocular surface-lacrimal gland unit. Therefore, dry eye is a multifactorial condition and an approach based on clinical subtypes is required for diagnosis and management. There is increasing evidence that inflammation is a contributing and exacerbating factor in dry eye conditions and anti-inflammatory or immunomodulatory therapy for chronic dry eye conditions may facilitate ocular surface healing. Other promising new treatments for dry eye include new generation artificial tear polymers and preservative systems, secretagogues, topical androgen supplements and surgical techniques for ocular surface reconstruction.