Cardiopulmonary exercise testing (CPET) has become an important clinical tool to evaluate exercise capacity and predict outcome in patients with heart failure and other cardiac conditions. It provides assessment of the integrative exercise responses involving the pulmonary, cardiovascular and skeletal muscle systems, which are not adequately reflected through the measurement of individual organ system function. CPET is being used increasingly in a wide spectrum of clinical applications for evaluation of undiagnosed exercise intolerance and for objective determination of functional capacity and impairment. This review focuses on the exercise physiology and physiological basis for functional exercise testing and discusses the methodology, indications, contraindications and interpretation of CPET in normal people and in patients with heart failure.