Carbon monoxide (CO) can exert potent anti-inflammatory effects in animal and cell culture models of sepsis, despite well-known lethal effects at high concentration. Endogenous biological CO arises from the enzymatic degradation of haem, mainly from haemoglobin turnover, catalysed by haem oxygenases (HO). The inducible form of HO, haem oxygenase 1 (HO-1) participates in endogenous cellular defence against oxidative stress. HO-1 confers cytoprotection in many models of organ and tissue injury where inflammatory processes are implicated, including sepsis. When applied exogenously at low concentration, CO mimics the cytoprotective potential of HO-1 induction in these models. CO confers protection against endotoxin shock in vitro and in vivo by inhibiting the production of pro-inflammatory cytokines, in a mechanism involving the modulation of p38 mitogen activated protein kinase. CO protection against vascular injury may involve both anti-inflammatory and antiproliferative effects. The protection afforded by CO against liver failure and inflammatory lung injury was associated with the modulation of inducible nitric oxide synthase. Recent in vitro studies indicate that CO inhibits proinflammatory signalling by differentially inhibiting the trafficking of toll-like receptors (TLRs) to lipid rafts. Additional candidate mechanisms in anti-inflammatory effects of CO include the increased expression of heat shock proteins and the tumour suppressor protein caveolin 1.