The observation of low transcutaneous arterial oxygen saturation (SaO2) in otherwise well sickle cell patients has lead to questions about the interpretation of pulse oximetry values in these patients. We undertook a prospective study of children with sickle cell disease to (1) determine the prevalence of, and factors associated with, low transcutaneous SaO2 in clinically well patients, (2) develop an algorithm for the use of pulse oximetry in acutely ill patients, and (3) assess the accuracy of pulse oximetry in these patients. Eighty-six clinically well children with hemoglobin (Hb) SS had a lower mean transcutaneous SaO2 than 22 Hb SC patients and 10 control subjects (95.6% v 99.1% v 99.0%, respectively; p < .001). In Hb SS patients, a history of acute chest syndrome and age greater than 5 years were associated with lower transcutaneous SaO2 (mean 93.8% for those with a history of acute chest syndrome v 97.8% for those without a history of acute chest syndrome, and 94.0% for patients = 5 years old v 97.2% for those < or = 5 years old; P < .001). These associations were not seen in Hb SC patients. During acute illness, Hb SS patients with acute chest syndrome had transcutaneous SaO2 values that were less than 96% and at least 3 points lower than measurements made when they were well. A nomogram was designed to aid in the interpretation of transcutaneous SaO2 in acutely ill Hb SS patients when a comparison value is not available. The accuracy of pulse oximetry was shown by the correlation between SaO2 measured by pulse oximetry and calculated by using the patient's oxygen dissociation curve and PaO2 (r = .97). This study provides evidence that Hb oxygen desaturation is not a universal finding among children with sickle cell disease and identifies factors associated with Hb oxygen desaturation. We conclude that pulse oximetry may be useful to assess whether progressive pulmonary dysfunction begins at an early age in Hb SS patients, and to assess acutely ill patients for the presence of hypoxemia associated with acute chest syndrome.