African swine fever virus (ASFV) can cause an acutely fatal haemorrhagic fever in domestic pigs although in its natural hosts, warthogs, bushpigs and the soft tick vector, Ornithodoros moubata, ASFV causes inapparent persistent infections. The virus is a large, cytoplasmic, double-stranded DNA virus which has a tropism for macrophages. As it is the only member of the Asfarviridae family, ASFV encodes many novel genes not encoded by other virus families. The ability of the virus to persist in its natural hosts and in domestic pigs, which recover from infection with less virulent isolates, shows that the virus has effective mechanisms to evade host defence systems. This review focuses on recent progress made in understanding the function of ASFV-encoded proteins, which are involved in modulating the host response to infection. Growing evidence suggests that a major strategy used by the virus is to modulate signalling pathways in infected macrophages, thus interfering with the expression of a large number of immunomodulatory genes. One potent immunomodulatory protein, A238L, inhibits both activation of the host NFkappaB transcription factor and inhibits calcineurin phosphatase activity. Calcineurin-dependent pathways, including activation of the NFAT transcription factor, are therefore inhibited. Another ASFV-encoded protein, CD2v, resembles the host CD2 protein, which is expressed on T cells and NK cells. This virus protein causes the adsorption of red blood cells around virus-infected cells and extracellular virus particles. Expression of the CD2v protein aids virus dissemination in pigs and the protein also has a role in impairing bystander lymphocyte function. This may be mediated either by a direct interaction of CD2v extracellular domain with ligands on lymphocytes or by an indirect mechanism involving interaction of the CD2v cytoplasmic tail with host proteins involved in signalling or trafficking pathways. Two ASFV proteins, an IAP and a Bcl2 homologue, inhibit apoptosis in infected cells and thus facilitate production of progeny virions. The prediction is that half to two-thirds of the approximately 150 genes encoded by ASFV are not essential for replication in cells but have an important role for virus survival and transmission in its hosts. These genes provide an untapped repository, and will be valuable tools for deciphering not only how the virus manipulates the host response to infection to avoid elimination, but also useful for understanding important host anti-viral mechanisms. In addition, they may provide leads for discovery of novel immunomodulatory drugs.