A non-invasive method for measuring pulmonary oxygen exchange is described using a plot of inspired oxygen partial pressure (PIO2) vs. oxygen saturation (SpO2). This method was assessed using nine normal subjects and 35 patients undergoing major surgery, including five thoracotomies. In each patient PIO2 was varied to produce a range of values of SpO2 between 85% and 99%. A model based on the inspired to arterial oxygen difference involving the shunt equation, solved by simultaneous numerical methods, was used to show how the PIO2 vs. SaO2 relationship could be used to derive two parameters of oxygen exchange, the PIO2-Pco2 difference and the Virtual Shunt. The model allows the inspired to arterial difference in PO2 to be divided into (a) an inspired to 'ideal' alveolar difference attributable to the balance between alveolar ventilation and oxygen uptake; (b) an 'ideal' alveolar to end-capillary difference attributable to inhomogeneity in ventilation/perfusion ratios; and (c) end-capillary to arterial difference attributable to true shunt, which was termed 'virtual shunt' because of the uncertainties of assuming fixed values for haemoglobin concentration and arteriovenous oxygen content difference. The coefficient of determination showed that there was a good fit of the model to the data. Because the method is model-based it enables extrapolation to different PIO2 values as well as the study of the evolution of changes in gas exchange under varying conditions.