Carbon monoxide (CO) is generated during incomplete combustion of carbon-containing compounds and leads to acute and chronic toxicity in animals and humans depending on the concentration and exposure time. In addition to exogenous sources, CO is also produced endogenously by the activity of heme oxygenases (HOs) and the physiological significance of HO-derived CO has only recently emerged. CO exerts vasoactive, anti-proliferative, anti-oxidant, anti-inflammatory and anti-apoptotic effects and contributes substantially to the important role of the inducible isoform HO-1 as a mediator of tissue protection and host defense. Exogenous application of low doses of gaseous CO might provide a powerful tool to protect organs and tissues under various stress conditions. Experimental evidence strongly suggests a beneficial effect under pathophysiological conditions such as organ transplantation, ischemia/reperfusion, inflammation, sepsis, or shock states. The cellular and molecular mechanisms mediating CO effects are only partially characterized. So far, only a few studies in humans are available, which, however, do not support the promising results observed in experimental studies. The protective effects of exogenous CO may strongly depend on the pathological condition, the mode, time point and duration of application, the administered concentration, and on the target tissue and cell. Differences in bioavailability of endogenous CO production and exogenous CO supplementation might also provide an explanation for the lack of protective effects observed in some experimental and clinical studies. Further randomized, controlled clinical studies are needed to clarify whether exogenous application of CO may turn into a safe and effective preventive and therapeutic strategy to treat pathophysiological conditions associated with inflammatory or oxidative stress.