The aim of this review is to summarise and critically evaluate studies of vestibular compensation published over the last 2 years, with emphasis on those concerned with the molecular mechanisms of this process of lesion-induced plasticity. Recent studies of vestibular compensation have confirmed and extended the previous findings that: (i) compensation of the static ocular motor and postural symptoms occurs relatively rapidly and completely compared to the dynamic symptoms, many of which either do not compensate substantially or else compensate variably due to sensory substitution and the development of sensori-motor strategies which suppress or minimize symptoms; (ii) static compensation is associated with, and may be at least partially caused by a substantial recovery of resting activity in the ipsilateral vestibular nucleus complex (VNC), which starts to develop very quickly following the unilateral vestibular deafferentation (UVD) but does not correlate perfectly with the development of some aspects of static compensation (e.g., postural compensation); and (iii) many complex biochemical changes are occurring in the VNC, cerebellum and even areas of the central nervous system like the hippocampus, following UVD. However, despite many recent studies which suggest the importance of excitatory amino acid receptors such as the N-methyl-D-aspartate receptor, expression of immediate early gene proteins, glucocorticoids, neurotrophins and nitric oxide in the vestibular compensation process, how these various factors are linked and which of them may have a causal relationship with the physiological changes underlying compensation, remains to be determined.