It is now recognized that mitochondria play an integral role in orchestrating the response of the cell to a wide variety of metabolic and environmental stressors. Of particular interest are the interactions of reactive oxygen and nitrogen species with the organelle and their potential regulatory function. The best understood example is the O(2) sensitive binding of NO (nitric oxide) to the heme group in cytochrome c oxidase. We have proposed that this reversible process serves the function of both regulating the formation of hydrogen peroxide from the respiratory chain for the purposes of signal transduction and controlling O(2) gradients in complex organs such as the liver or heart. It now appears that maladaptation in this pathway leads to a mitochondrial dysfunction which has some of the characteristics of hypoxia, such as a deficit in ATP, but occurs in the presence of normal or enhanced levels of O(2). These are the optimal conditions for the formation of reactive nitrogen species (RNS), such as peroxynitrite which lead to the irreversible modification of proteins. We term this unique pathological condition Nitroxia and describe how it may contribute to the pathology of chronic inflammatory diseases using ethanol-dependent hepatotoxicity as an example.