Chemotherapy-induced nausea and vomiting (CINV) is associated with a significant deterioration in quality of life. The emetogenicity of the chemotherapeutic agents, repeated chemotherapy cycles, and patient characteristics (female gender, younger age, low alcohol consumption, history of motion sickness) are the major risk factors for CINV. This review provides a detailed description of palonosetron, a second-generation 5-hydroxytryptamine 3 (5-HT(3)) receptor antagonist. The chemistry and pharmacology of palonosetron are described, as well as the initial and recent clinical trials. Palonosetron has a longer half-life and a higher binding affinity than the first-generation 5-HT(3) receptor antagonists. Palonosetron has been approved for the prevention of acute CINV in patients receiving either moderately or highly emetogenic chemotherapy and for the prevention of delayed CINV in patients receiving moderately emetogenic chemotherapy. In recent studies, compared to the first-generation 5-HT(3) receptor antagonists, palonosetron in combination with dexamethasone demonstrated better control of delayed CINV in patients receiving highly emetogenic chemotherapy. There were no clinically relevant adverse reactions reported in the palonosetron clinical trials which were different from the common reactions reported for the 5-HT(3) receptor antagonist class. Due to its efficacy in controlling both acute and delayed CINV, palonosetron may be very effective in the clinical setting of multiple-day chemotherapy and bone marrow transplantation.