In recent years many studies have demonstrated stimulatory effects of pulsed electromagnetic fields (PEMF) on biological tissue. However, controversies have also surrounded the research often due to the lack of knowledge of the different physical consequences of static versus pulsed electromagnetic fields. PEMF is widely used for treating fractures and non-unions as well as for treating diseases of the joints. Furthermore, new research has suggested that the technology can be used for nerve regeneration and wound healing although conclusive clinical trials, besides those for fracture healing, are still lacking. Despite the apparent success of the PEMF technology very little is known regarding the coupling between pulsed electrical fields and biochemical events leading to cellular responses. Insight into this research area is therefore of great importance. In this review we describe the physical properties of PEMF-induced electrical fields and explain the typical set up for coils and pulse patterns. Furthermore, we discuss possible models that can account for mechanisms by which induced electric fields are able to enhance cellular signaling. We have emphasized the currently well-documented effects of PEMF on cell function from tissue culture and animal studies as well as from studies describing clinical effects on bone growth, nerve growth and angiogenesis. We believe this relatively new technology can become relevant for treating a variety of physiological conditions demanding enhanced cellular activity.