Biologic agents have substantially advanced the treatment of immunological disorders, including chronic inflammatory and autoimmune diseases. However, these drugs are often associated with adverse events (AEs), including allergic, immunological and other unwanted reactions. AEs can affect almost any organ or system in the body and can occur immediately, within minutes to hours, or with a delay of several days or more after initiation of biologic therapy. Although some AEs are a direct consequence of the functional inhibition of biologic-agent-targeted antigens, the pathogenesis of other AEs results from a drug-induced imbalance of the immune system, intermediary factors and cofactors, a complexity that complicates their prediction. Herein, we review the AEs associated with biologic therapy most relevant to rheumatic and immunological diseases, and discuss their underlying pathogenesis. We also include our recommendations for the medical management of such AEs. Increased understanding and improved risk management of AEs induced by biologic agents will enable better use of these versatile immune-response modifiers.