The use of nitric oxide gas by inhalation to treat hypoxemia and pulmonary hypertension in mechanically ventilated patients has increased in the last few years. Nitric oxide is a potent vasodilator gas that when given by the inhalation route is selective for the pulmonary vessels and for ventilated lung regions. This double selectivity makes nitric oxide inhalation an ideal approach to treat patients with acute respiratory failure, in which hypoxemia and pulmonary hypertension are the main features. In this clinical setting, inhaled nitric oxide reduces pulmonary artery pressure and improves pulmonary gas exchange by diverting pulmonary blood flow from nonventilated to well-ventilated lung areas. The effects of inhaled nitric oxide upon oxygenation in patients with acute respiratory failure depend on the distribution of ventilation-perfusion abnormalities. The different distributions of these abnormalities among patients and even in the same patient during the course of the disease could be the reason of the great variability of responses to inhaled nitric oxide in acute respiratory failure. Nitric oxide has other actions that may be beneficial in patients with acute respiratory failure: reducing pulmonary artery pressure may attenuate pulmonary edema and inhibiting lung neutrophil migration and platelet aggregation may reduce the inflammatory lung process. Inhalation of nitric oxide may also have some potentially harmful effects due to nitrogen dioxide and peroxynitrite formation. The use of inhaled nitric oxide to treat patients with acute respiratory failure must take into account the benefit-risk ratio. Knowing the underlying pathophysiology of the disease and the nature of nitric oxide, its use can be beneficial, even life-saving, for some patients with refractory hypoxemia.