Implanted biomedical devices are playing an increasingly important role in the treatment of central nervous system disorders. While devices such as deep brain stimulation electrodes and drug delivery systems have shown clinical success in chronic applications, other devices such as nerve guidance substrates and recording electrodes that operate over a very short length scale have not had the same kind of clinical impact. By reviewing what is currently known about the brain tissue response to implanted electrodes, the authors propose that the foreign-body response, which changes the tissue structure immediately surrounding implanted devices, may be the reason near-function devices are stalled in preclinical development. The article concludes by reviewing recent efforts to reduce the foreign body response, which shows promise to accelerate the clinical development of this new generation of biomedical devices.