Fuchs' endothelial corneal dystrophy (FECD) is the most common corneal endothelial dystrophy and commonly results in loss of vision. This review highlights the advances in our understanding of the pathophysiology of FECD through in vivo confocal microscopy (IVCM) and in vitro studies. All layers of the cornea may be affected by FECD, either primarily or secondary to corneal oedema. The primary changes include reduction of endothelial cell density and changes to endothelial morphology. Thickening of Descemet's membrane occurs, with addition of collagenous layers and formation of guttae. Changes secondary to corneal oedema include formation of epithelial bullae and sub-epithelial fibroblast and collagen infiltration, reduction of sub-basal corneal nerve density, and reduced anterior keratocyte density and fibroblastic transformation of stressed keratocytes in the stroma. Many of the microstructural changes occurring in FECD may be observed with IVCM, and these observations correlate well with histological studies. IVCM studies of early and mid-stage FECD are likely to provide further insight into the sequence of pathological processes that occur in this disease.