This selective review of the biological effects of ultrasound presents a synopsis of our current understanding of how cells insonated in vitro are affected by inertial cavitation from the standpoint of physical and chemical mechanisms. The focus of this review is on the physical and chemical mechanisms of action of inertial cavitation which appear to be effective in causing biological effects. There are several fundamental conditions which must be satisfied before cavitation-related bioeffects may arise. First, bubbles must be created and then brought into proximity to cells. Exposure methods are critical in this regard, and simple procedures such as rotation of a vessel containing the cells during exposure can drastically alter the results. Second, once association is achieved between bubbles and cells, the former must interact with the latter to produce a bioeffect. It is not certain that the inertial event is the prime mechanism by which cells are lysed; there is evidence that the turbulence associated with bubble translation may cause lysis. Additionally, there appear to be chemical and other physical mechanisms by which inertial cavitation may affect cells; these include the generation of biologically effective sonochemicals and the apparent emission of ultraviolet (UV) and soft X-rays. The evidence for inertial cavitation occurring within cells is critically reviewed.