Carbon monoxide (CO), a product of organic oxidation processes, arises in vivo during cellular metabolism, most notably heme degradation. CO binds to the heme iron of most hemoproteins. Tissue hypoxia following hemoglobin saturation represents a principle cause of CO-induced mortality in higher organisms, though cellular targets cannot be excluded. Despite extreme toxicity at high concentrations, low concentrations of CO can confer cytoprotection during ischemia/reperfusion or inflammation-induced tissue injury. Likewise, heme oxygenase, an enzyme that produces CO, biliverdin and iron, as well as a secondary increase in ferritin synthesis, from the oxidation of heme, can confer protection in vivo and in vitro. CO has been shown to affect several intracellular signaling pathways, including guanylate cyclase, which generates guanosine 3′:5′ cyclic monophosphate and the mitogen-activated protein kinases (MAPK). Such pathways mediate, in part, the known vasoregulatory, anti-inflammatory, anti-apoptotic and anti-proliferative effects of this gas. Exogenous CO delivered at low concentrations is showing therapeutic potential as an anti-inflammatory agent and as such can modulate numerous pathophysiological states. This review will delve into the biological significance and medical applications of this gas molecule. BioEssays 26:270–280, 2004. © 2004 Wiley Periodicals, Inc.