Inert gas washout was first described more than 60 years ago and 2 principal tests have been developed from it: the single breath and multiple breath washout (MBW) techniques. The invention of fast responding gas analysers almost 60 years ago and small computers 30 years later have facilitated breath-by-breath analysis and the development of sophisticated analysis techniques. It is now possible to detect not only the degree of pulmonary ventilation inhomogeneity, but also to gain important insight into the location of the underlying disease process. While single breath washout requires a full vital capacity effort, tidal breathing during the multiple breath test requires minimal co-operation and co-ordination, and is feasible in subjects of all ages. Available MBW normative data from parameters, such as the lung clearance index, appears to vary minimally with age, making MBW particularly useful to follow children longitudinally. Multiple breath inert gas washout has demonstrated improved sensitivity, in comparison to spirometry, in the early detection of a number of important disease processes, including cystic fibrosis. Despite this, these important techniques remain under-utilised in the clinical setting and there is a lack of commercially available devices currently available. The recent resurgence of research in this area has produced a large number of important studies and a pronounced international interest has developed in these techniques. This review article will provide an overview of the theoretical background of inert gas washout and analysis indices, review important physiological and clinical insights gained from research to date (as well as from our own experience) to illustrate its utility, and outline the challenges that lie ahead in incorporating these techniques into the mainstream clinical setting.