It has been known for more than 60 years, and suspected for over 100, that alveolar hypoxia causes pulmonary vasoconstriction by means of mechanisms local to the lung. For the last 20 years, it has been clear that the essential sensor, transduction, and effector mechanisms responsible for hypoxic pulmonary vasoconstriction (HPV) reside in the pulmonary arterial smooth muscle cell. The main focus of this review is the cellular and molecular work performed to clarify these intrinsic mechanisms and to determine how they are facilitated and inhibited by the extrinsic influences of other cells. Because the interaction of intrinsic and extrinsic mechanisms is likely to shape expression of HPV in vivo, we relate results obtained in cells to HPV in more intact preparations, such as intact and isolated lungs and isolated pulmonary vessels. Finally, we evaluate evidence regarding the contribution of HPV to the physiological and pathophysiological processes involved in the transition from fetal to neonatal life, pulmonary gas exchange, high-altitude pulmonary edema, and pulmonary hypertension. Although understanding of HPV has advanced significantly, major areas of ignorance and uncertainty await resolution.