Heme oxygenase (HO) catalyzes physiological heme degradation and consists of two structurally related isozymes, HO-1 and HO-2. Here we show that HO-2-deficient (HO-2(-/-)) mice exhibit hypoxemia and hypertrophy of the pulmonary venous myocardium associated with increased expression of HO-1. The hypertrophied venous myocardium may reflect adaptation to persistent hypoxemia. HO-2(-/-) mice also show attenuated ventilatory responses to hypoxia (10% O2) with normal responses to hypercapnia (10% CO2), suggesting the impaired oxygen sensing. Importantly, HO-2(-/-) mice exhibit normal breathing patterns with normal arterial CO2 tension and retain the intact alveolar architecture, thereby excluding hypoventilation and shunting as causes of hypoxemia. Instead, ventilation-perfusion mismatch is a likely cause of hypoxemia, which may be due to partial impairment of the lung chemoreception probably at pulmonary artery smooth muscle cells. We therefore propose that HO-2 is involved in oxygen sensing and responsible for the ventilation-perfusion matching that optimizes oxygenation of pulmonary blood.