Over the last decade, studies have unraveled many aspects of endogenous production and physiological functions of carbon monoxide (CO). The majority of endogenous CO is produced in a reaction catalyzed by the enzyme heme oxygenase (HO). Inducible HO (HO-1) and constitutive HO (HO-2) are mostly recognized for their roles in the oxidation of heme and production of CO and biliverdin, whereas the biological function of the third HO isoform, HO-3, is still unclear. The tissue type-specific distribution of these HO isoforms is largely linked to the specific biological actions of CO on different systems. CO functions as a signaling molecule in the neuronal system, involving the regulation of neurotransmitters and neuropeptide release, learning and memory, and odor response adaptation and many other neuronal activities. The vasorelaxant property and cardiac protection effect of CO have been documented. A plethora of studies have also shown the importance of the roles of CO in the immune, respiratory, reproductive, gastrointestinal, kidney, and liver systems. Our understanding of the cellular and molecular mechanisms that regulate the production and mediate the physiological actions of CO has greatly advanced. Many diseases, including neurodegenerations, hypertension, heart failure, and inflammation, have been linked to the abnormality in CO metabolism and function. Enhancement of endogenous CO production and direct delivery of exogenous CO have found their applications in many health research fields and clinical settings. Future studies will further clarify the gasotransmitter role of CO, provide insight into the pathogenic mechanisms of many CO abnormality-related diseases, and pave the way for innovative preventive and therapeutic strategies based on the physiologic effects of CO.