An iron-containing, tetrapyrrole ring, heme is an essential prosthetic group in an array of proteins that comprehensively affect cellular function and metabolism; yet "free" heme in sufficient amounts can be damaging to the kidney and other organs because of its bioreactivity and pro-oxidant effects. This review discusses the cellular metabolism of heme in health and disease and covers such areas as the synthesis of heme and its utilization in heme proteins; mechanisms underlying the toxicity of heme; and the extent to which pathophysiologic processes, such as renal incorporation of heme proteins or destabilization of intracellular heme proteins, increase intracellular levels of heme and provoke renal injury. The main catabolic process that degrades heme, the heme oxygenase (HO) system, is reviewed, and evidence for the protective effects of HO-1 against acute and chronic heme/heme protein-induced renal injury is summarized. Finally, current views regarding the molecular basis for heme-induced upregulation of HO-1 are discussed.