Ten patients with interstitial lung disease were studied with regard to pulmonary gas exchange and diffusion limit at rest and during exercise. The total lung capacity was reduced to 64% and the transfer factor of the lung to 36% of reference. Pulmonary vascular resistance was increased by 50% above the upper normal limit. The ventilation-perfusion relationship (VA/Q), assessed by a multiple inert gas elimination technique, showed 2% shunt and 5% of lung blood flow perfusing regions with a low VA/Q (VA/Q less than 0.1) at rest. PaO2 derived from the VA/Q distribution was 9.3 kPa and correlated significantly (p less than 0.01) with measured PaO2 (9.9 kPa). During light exercise (30 W), the sum of the shunt and perfusion of low VA/Q regions was unaltered (7%), and PaO2 derived from the VA/Q distribution was the same as at rest (9.0 kPa). Measured PaO2 fell, however, to 7.1 kPa and the alveolar-oxygen tension difference (P(A-a)O2) was doubled to 7.0 kPa. It is concluded that a limitation on diffusion across the alveolar-capillary membrane developed during exercise, contributing approximately 30% to P(A-a)O2.