Hypoxia causes constriction in small pulmonary arteries and dilatation in systemic arteries. Hypoxic pulmonary vasoconstriction (HPV) is an important mechanism by which pulmonary blood flow is controlled in the fetus and by which local lung perfusion is matched to ventilation in the adult. HPV reduces the flow of desaturated blood through underventilated areas of lung. Even though many vasoactive substances have been examined as possible mediators of HPV, these appear more likely to be modulators than mediators. Hypoxic contraction has been demonstrated in single pulmonary vascular smooth muscle cells (PVSMC). The ability to sense changes in oxygen tension is observed in PVSMG and type 1 cells of the carotid body. In both cells, hypoxia has been shown to inhibit an outward potassium current, thus causing membrane depolarization and calcium entry through the voltage-dependent calcium channels. In both cells there is evidence to suggest that changes in the redox status of the oxygen-sensitive potassium channel or channels may control current flow, so that the channel is open when oxidized and closed when reduced. The redox status may be determined by the effects of hypoxia on mitochondrial/peroxisomal function or on the activity of an oxidase similar to NAD(P)H oxidase. More studies are needed to precisely define the individual potassium channels responsive to hypoxia and to confirm the gating mechanism. In systemic arteries hypoxia causes an increased current through ATP-dependent potassium channels and vasodilatation, whereas in the pulmonary arteries hypoxia inhibits potassium current and causes vasoconstriction.