Since the discovery of neuroepithelial bodies (NEB) in the late 1930s, evidence has accumulated to suggest that these cells may function as hypoxia-sensitive airway sensors. Until recently, this hypothesis was based largely on morphological observations. The use of in vitro models of isolated NEB, combined with electrophysiological approaches, have provided direct evidence that NEB cells express a membrane-bound O2 sensor and are the transducers of hypoxic stimulus. Here, we review the historical evidence and current state of knowledge of the oxygen-sensing properties of NEB cells, comparison with other O2 sensing cells, as well as recent advances that have been made using molecular and electrophysiological techniques. The possible role of NEB in perinatal pulmonary pathophysiology is also discussed.