CO is a colorless and odorless gas produced by the incomplete combustion of hydrocarbons, both of natural and anthropogenic origin. Several microorganisms, including aerobic and anaerobic bacteria and anaerobic archaea, use exogenous CO as a source of carbon and energy for growth. On the other hand, eukaryotic organisms use endogenous CO, produced during heme degradation, as a neurotransmitter and as a signal molecule. CO sensors act as signal transducers by coupling a “regulatory” heme-binding domain to a “functional” signal transmitter. Although high CO concentrations inhibit generally heme-protein actions, low CO levels can influence several signaling pathways, including those regulated by soluble guanylate cyclase and/or mitogen-activated protein kinases. This review summarizes recent insights into CO metabolism, sensing, and signaling.