Allergic rhinitis has the greatest prevalence of any respiratory disease and affects about 20% of the population in North America and Europe. There is an increasing need for allergen challenge systems to test anti-allergic drugs under well-controlled conditions. The allergen challenge chamber (ACC) is a room that enables reproducible challenges with controlled levels of inhalant allergens, temperature and humidity for several hours. ACCs have been used in Europe, North America and Japan to evaluate symptomatic and anti-inflammatory medications for the treatment of allergic rhinitis. This review summarizes the experience with a typical ACC in Germany, the Fraunhofer Challenge Chamber, and describes the stability and reproducibility of the allergen exposure in the chamber. It further provides data for the specificity and reproducibility of clinical read-out parameters, such as nasal symptom scores, nasal flow rates and nasal secretions, as well as of nasal biomarkers obtained in different validation studies. Typical study designs for testing the acute and prophylactic treatment effects of anti-allergic substances are discussed. Regulatory authorities, such as the FDA and EMA, recommend the use of ACCs in drug development to evaluate the optimal dose and onset of action during early clinical development. In combination with natural-exposure Phase III studies, they provide supportive evidence of superiority over placebo as an additional pharmacodynamic assessment tool. In particular, ACC studies may be of additional value in the clinical development of immunotherapy, because the variability of natural allergen exposure hampers the demonstration of efficacy in clinical trials.