In patients with pulmonary disease, the diffusing capacity for carbon monoxide has been used to predict abnormal gas exchange in the lung. However, abnormal values for arterial blood gases during exercise are likely to be the most sensitive manifestations of lung disease. We compared the single-breath diffusing capacity for carbon monoxide at rest with measurements of gas exchange during exercise, including arterial oxygen tension, the alveolar-arterial difference in oxygen tension, the arterial-end-tidal difference in carbon dioxide tension, and the dead-space/tidal-volume ratio in 276 current and former shipyard workers. Sixteen workers had a diffusing capacity for carbon monoxide below 70 percent of predicted; one or more measurements of gas exchange during exercise were abnormal in 14. In contrast, of 96 men who had abnormal gas exchange during exercise, only 14 had a diffusing capacity for carbon monoxide below 70 percent of predicted. Neither the type nor the degree of abnormality in gas exchange could be predicted from the diffusing capacity. We conclude that diffusing capacity for carbon monoxide at rest is a specific but insensitive predictor of abnormal gas exchange during exercise and that, if indicated, measurements of arterial blood gases should be obtained during exercise.