Exactly how the immune system discriminates between all environmental antigens to which it reacts vs. all self-antigens to which it does not, is a principal unanswered question in immunology. As set forth in this review, because of the advances in our understanding of the immune system that have occurred in the last 50 years, for the first time it is possible to formulate a new theory, termed the "Quantal Theory of Immunity", which reduces the problem from the immune system as a whole, to the individual cells comprising the system, and finally to a molecular explanation as to how the system behaves as it does.