We previously presented a method based on a computer lung model for determining the distribution of both specific ventilation and specific diffusing capacity. These argon and carbon monoxide (CO) washin and washout studies were obtained in 12 normal subjects and 24 patients with varying degrees of obstructive lung disease. In addition to end-tidal and mixed expired gas concentrations, the expired waveform for both gases was sampled. In patients we found that this method failed to adequately describe CO dynamics during the early part of expiration; predicted concentrations were higher than actual data. Modifications of the original model that satisfy all data are presented. This new model suggests that CO uptake occurs in spaces with ventilatory properties of dead space. The accuracy and reliability of these observations were established by computer simulation studies as well as by repeated testing in one subject. These proved to be highly reproducible over a period of 5 mo. Standard parameter sensitivity tests showed parameters to vary by less than 10% and to be stable even when realistic levels of noise were added to the data. We conclude that studies involving ventilation of insoluble gases are insufficient to describe gas exchange in the lung. The addition of an exchangeable gas adds significant understanding of lung function, particularly in disease.