In the 1930s and 1940s, photo cells permitted German, English, and American physiologists to construct ear oximeters with red and infrared light, requiring calibration. In 1940 Squire recognized that changes of red and infrared light transmission caused by pneumatic tissue compression permitted saturation to be computed. In 1949 Wood used this idea to compute absolute saturation continuously from the ratios of optical density changes with pressure in an ear oximeter. In 1972 Takuo Aoyagi, an electrical engineer at Nihon Kohden company in Tokyo, was interested in measuring cardiac output noninvasively by the dye dilution method using a commercially available ear oximeter. He balanced the red and infrared signals to cancel the pulse noise which prevented measuring the dye washout accurately. He discovered that changes of oxygen saturation voided his pulse cancellation. He then realized that these pulsatile changes could be used to compute saturation from the ratio of ratios of pulse changes in the red and infrared. His ideas, equations and instrument were adapted, improved and successfully marketed by Minolta about 1978, stimulating other firms to further improve and market pulse oximeters worldwide in the mid 1980s. Dr. Aoyagi and associates provided a detailed history for this paper.