Previous studies (J. Appl. Physiol. 58: 978-988 and 989-995, 1985) have shown both worsening ventilation-perfusion (VA/Q) relationships and the development of diffusion limitation during heavy exercise at sea level and during hypobaric hypoxia in a chamber [fractional inspired O2 concentration (FIO2) = 0.21, minimum barometric pressure (PB) = 429 Torr, inspired O2 partial pressure (PIO2) = 80 Torr]. We used the multiple inert gas elimination technique to compare gas exchange during exercise under normobaric hypoxia (FIO2 = 0.11, PB = 760 Torr, PIO2 = 80 Torr) with earlier hypobaric measurements. Mixed expired and arterial respiratory and inert gas tensions, cardiac output, heart rate (HR), minute ventilation, respiratory rate (RR), and blood temperature were recorded at rest and during steady-state exercise in 10 normal subjects in the following order: rest, air; rest, 11% O2; light exercise (75 W), 11% O2; intermediate exercise (150 W), 11% O2; heavy exercise (greater than 200 W), 11% O2; heavy exercise, 100% O2 and then air; and rest 20 minutes postexercise, air. VA/Q inequality increased significantly during hypoxic exercise [mean log standard deviation of perfusion (logSDQ) = 0.42 +/- 0.03 (rest) and 0.67 +/- 0.09 (at 2.3 l/min O2 consumption), P less than 0.01]. VA/Q inequality was improved by relief of hypoxia (logSDQ = 0.51 +/- 0.04 and 0.48 +/- 0.02 for 100% O2 and air breathing, respectively). Diffusion limitation for O2 was evident at all exercise levels while breathing 11% O2.(ABSTRACT TRUNCATED AT 250 WORDS)