Diarrhea continues to be a challenge despite developments in science and remains a considerable source of morbidity and mortality. A wide variety of differential diagnoses need to be considered when evaluating patients with diarrhea. Diarrhea can be classified based on the duration into acute, persistent, and chronic diarrhea and this classification is important for diagnostic and treatment considerations. The epidemiological settings where diarrhea is seen help the clinician to narrow down the differential causes of diarrhea and to investigate appropriately. Acute diarrhea can happen in the setting of the community or it can be hospital acquired or acquired during travel. The etiologies and the diagnostic algorithms are different for each of these settings. The pathophysiolgy of diarrhea can be classified based on the mechanism into secretory, osmotic, inflammatory, iatrogenic/drug related, and functional/motility-related diarrhea. The differential diagnosis and the clinical classification depend on the basic pathophysiology with which diarrhea presents and can be inflammatory, watery encompassing osmotic and secretory, and fatty diarrhea. Gaining a better understanding of the pathophysiology of diarrhea will help us to initiate better preventive and treatment measures to improve the quality of life of these patients.