Propofol (2,6-diisopropylphenol) is the most commonly used intravenous agent for induction of anesthesia. It is also used for maintenance of anesthesia and sedation in both Intensive Care Units and outpatient procedural settings. Its success in the clinical setting has been a result of its rapid onset, short duration of action, and minimal side effects despite disadvantages associated with its oil emulsion formulation. Early attempts to alter the standard emulsion or to develop new formulations with cyclodextrins and micelles to resolve issues with pain upon injection, the need for antimicrobial agents, and possible hyperlipidemia have mostly failed. With these challenges in the foreground, attention has now shifted to the use of more prodrugs and exogenous alternatives, the success of which is yet to be determined. These new agents must offer significant clinical advantages over the well-entrenched, generic propofol oil emulsion to justify higher costs and to be well received in the increasingly cost-conscious healthcare marketplace.