Frusemide is administered to large numbers of North American racehorses because of its putative prophylactic effect on exercise induced pulmonary haemorrhage (EIPH). Two issues central to the use of frusemide in performance horses remain to be resolved: 1) Does frusemide reduce the incidence or severity of EIPH? and 2) does frusemide alter athletic performance or the capacity for muscular work, separate from any effect on EIPH? These issues are discussed, as is the reasoning that EIPH is, at least in part, a consequence of exertion induced high vascular transmural pressures and that reduction of these pressures by frusemide is the mechanism by which frusemide reduces the incidence or severity of EIPH. It is concluded that, on balance, it appears unlikely that frusemide reduces the incidence of EIPH, although it may reduce the severity of haemorrhage. The evidence that frusemide is ergogenic is evaluated and a potential mechanism for an effect of frusemide on athletic capacity, the frusemide induced reduction in body weight, is discussed.