Pulse oximetry (SpO2) is a widely used, non‐invasive method of estimating arterial oxygen saturation. Measurement of SpO2 relies on comparing the relative absorption of light in the red and infrared regions with the expected absorption pattern of oxygenated and deoxygenation adult hemoglobin. As this screening tool has entered common clinical use, test limitations have emerged, including concern about the risk of overestimation of oxygen saturation by pulse oximetry in a disproportionate number of people with dark skin pigment, leading to potential for underdiagnosis of true hypoxemia. In addition, a range of challenges may arise in patients with increased levels of methemoglobin – whether acquired or inherited – carboxyhemoglobin, or in patients with a subset of inherited variant hemoglobins. It is important for Hematologists, and indeed all clinicians who rely on pulse oximetry, to understand the principles and limitations of this ubiquitous test.