The diffusing capacity for carbon monoxide (DLCO) and the functional residual capacity (FRC) of the lung were measured in 5 healthy Thoroughbreds before and after instillation of autologous blood into their lungs, in an attempt to develop a method to quantitate extravascular blood in the lungs of horses with exercise-induced pulmonary hemorrhage. Mean (+/- SD) baseline values of DLCO and FRC were 333.8 +/- 61.9 ml/min/mm of Hg and 21.464 +/- 4.156 L, respectively. Blood instillation resulted in decreases in DLCO and FRC. The paradoxic decrease in DLCO (we were expecting to find an increase owing to blood in the airspaces, as has been reported in people) appears to be associated with the bronchoscopic procedure and with presence of blood in the airways. We concluded that rebreathing DLCO measurements were not effective for detecting blood introduced bronchoscopically into the lungs of horses.