Carbon monoxide (CO) is increasingly recognized as a cell-signalling molecule akin to nitric oxide (NO). CO has attracted particular attention as a potential therapeutic agent because of its reported anti-hypertensive, anti-inflammatory and cell-protective effects. We discuss recent progress in identifying new effector systems and elucidating the mechanisms of action of CO on, e.g., ion channels, as well as the design of novel methods to monitor CO in cellular environments. We also report on recent developments in the area of CO-releasing molecules (CORMs) and materials for controlled CO application. Novel triggers for CO release, metal carbonyls and degradation mechanisms of CORMs are highlighted. In addition, potential formulations of CORMs for targeted CO release are discussed.