Cholesteatoma is a potential end-stage outcome of chronic ear infections that can result in the destruction of temporal bone structures with potential resultant hearing loss, vertigo, and intracranial infectious complications. There is currently no treatment apart from surgery for this condition, and despite years of study, the histopathogenesis of this disease remains poorly understood. This review is intended to summarize our accumulated knowledge of the mechanisms of cholesteatoma development and the underlying molecular biology. Attention will be directed particularly to recent developments, covering many potential pharmacologic targets that could be used to treat this disease in the future.