There is an extensive literature on methods for discriminating between an increased shunt and a reduced ratio of ventilation to perfusion. In this review we prefer the terms "VA/Q" and "reduced or low VA/Q" rather than "V/Q inequality" to refer to the effects on arterial oxygenation of reducing V/Q below 0.8 to about 0.1. Almost without exception the conventional methods for measuring shunt and reduced VA/Q are invasive as well as technically complex. For most clinicians who are dealing with a hypoxemic patient the relevance of these entities is not so obvious as to justify the time and difficulty in either understanding or measuring them. However this review shows that, while an increased shunt and a decreased VA/Q both reduce arterial oxygen saturation (SaO2) at a particular inspired oxygen concentration (PIO2), the effect of shunt and reduced VA/Q have important clinical differences on the relationship between PIO2 and SaO2. The review also outlines a simple non-invasive method for measuring shunt and reduced VA/Q which illustrates the value of discriminating between them in clinical practice.