The first 2000 incidents reported to the Australian Incident Monitoring Study were analysed with respect to the role of the pulse oximeter. Of these 184 (9%) were first detected by a pulse oximeter and there were a further 177 (9%) in which desaturation was recorded. Of the 1256 incidents which occurred in association with general anaesthesia 48% were "human detected" and 52% "monitor detected". The pulse oximeter was ranked first and detected 27% of these monitor detected incidents; this figure would have been over 40% if an oximeter had always been used and its more informative modulated pulse tone relied upon instead of that of the "bleep" of the ECG. The pulse oximeter is the "front-line" monitor for endobronchial intubation, the fourth most common incident in association with general anaesthesia (it detected 87% of the 76 cases in which it was in use). It also played an invaluable role as a "back-up" monitor in 40 life-threatening situations in which "front-line" monitors (e.g. oxygen analyser, low pressure alarm, capnograph) were either not in use, were being used incorrectly or failed. Other situations detected, in order of frequency of detection, were: circuit disconnection, circuit leak, desaturation (severe shunt), oesophageal intubation, aspiration and/or regurgitation, pulmonary oedema, endotracheal tube obstruction, severe hypotension, failure of oxygen delivery, hypoxic gas mixture, hypoventilation, anaphylaxis, air embolism, bronchospasm, malignant hyperthermia, and tension pneumothorax.(ABSTRACT TRUNCATED AT 250 WORDS)