A significant part of the pathogenesis of bacterial diseases is explained by the production of toxins, over a third of which act by damaging membranes of target cells. Included with these membrane-damaging toxins is a large group of immunologically-related proteins known as the thiol-activated toxins. These toxins lyse or modulate the function of all cells containing cholesterol in their membranes: a property irreversibly inhibited by cholesterol. Some of the thiol-activated toxins are also antibody-binding proteins and can activate the classical complement pathway. A distinctive feature of the thiol-activated toxins is the formation of extremely large arc- and ring-shaped structures in target membranes. These structures are believed to represent the lesions within cell membranes. In the last decade there have been tremendous advances in our knowledge of these toxins. This review describes our current understanding of the structure and mode of action of the thiol-activated toxins. It also summarizes the evidence from in vitro and in vivo studies that they contribute significantly to the pathogenesis of disease caused by several Gram-positive bacteria.