1. The relationship between hypoxaemia, as measured by arterial blood oxygen saturation, and red cell volume is reported in nineteen patients with chronic airways obstruction and raised peripheral venous haematocrit. 2. These patients showed an increase in red cell mass response to lowered oxygen saturations when compared with normal subjects living at high altitudes. 3. Comparison with previous studies suggests that such a significant linear relationship between arterial oxygen saturation and red cell mass only occurs in those patients suffering from chronic lung disease in whom the peripheral venous haematocrit is raised. 4. As arterial oxygen saturation is only one of six factors determining tissue oxygenation, the isolated relationship between red cell volume and oxygen saturation is likely to be an oversimplification.