The invention is directed to 3,5-disubstituted and 3,5,7-trisubstituted-3H-oxazolo and 3H-thiazolo[4,5-d]pyrimidin-2-one compounds and prodrugs thereof that have immunomodulatory activity. The invention is also directed to the therapeutic or prophylactic use of such compounds and pharmaceutical compositions containing them, and to methods of treating diseases and disorders described herein, by administering effective amounts of such compounds and prodrugs.