Carotid bodies are the sensory organs for detecting systemic hypoxia and the ensuing reflexes prevent the development of tissue/cellular hypoxia. Although every mammalian cell responds to hypoxia, O2 sensing by the carotid body is unique in that it responds instantaneously (within seconds) to even a modest drop in arterial PO2. Sensing hypoxia in the carotid body requires an initial transduction step involving O2 sensor(s) and transmitter(s) for subsequent activation of the afferent nerve ending. This brief review focuses on: (a) whether the transduction involves 'single' or 'multiple' O2 sensors; (b) the identity of the excitatory transmitter(s) responsible for afferent nerve activation by hypoxia; and (c) whether inhibitory transmitters have any functional role. The currently proposed O2 sensors include various haem-containing proteins, and a variety of O2-sensitive K+ channels. It is proposed that the transduction involves an ensemble of, and interactions between, haem-containing proteins and O2-sensitive K+-channel proteins functioning as a 'chemosome'; the former for conferring sensitivity to wide range of PO2 values and the latter for the rapidity of the response. Hypoxia releases both excitatory and inhibitory transmitters from the carotid body. ATP is emerging as an important excitatory transmitter for afferent nerve activation by hypoxia. Whereas the inhibitory messengers act in concert with excitatory transmitters like a 'push-pull' mechanism to prevent over excitation, conferring the 'slowly adapting' nature of the afferent nerve activation during prolonged hypoxia. Further studies are needed to test the interactions between putative O2 sensors and excitatory and inhibitory transmitters in the carotid body.