Alternative oxidase (AOX) is a non-energy conserving terminal oxidase in the plant mitochondrial electron transport chain. While respiratory carbon oxidation pathways, electron transport, and ATP turnover are tightly coupled processes, AOX provides a means to relax this coupling, thus providing a degree of metabolic homeostasis to carbon and energy metabolism. Beside their role in primary metabolism, plant mitochondria also act as "signaling organelles", able to influence processes such as nuclear gene expression. AOX activity can control the level of potential mitochondrial signaling molecules such as superoxide, nitric oxide and important redox couples. In this way, AOX also provides a degree of signaling homeostasis to the organelle. Evidence suggests that AOX function in metabolic and signaling homeostasis is particularly important during stress. These include abiotic stresses such as low temperature, drought, and nutrient deficiency, as well as biotic stresses such as bacterial infection. This review provides an introduction to the genetic and biochemical control of AOX respiration, as well as providing generalized examples of how AOX activity can provide metabolic and signaling homeostasis. This review also examines abiotic and biotic stresses in which AOX respiration has been critically evaluated, and considers the overall role of AOX in growth and stress tolerance.