During the last decades due to the development of new immunosuppressive agents and improvements in organ preservation methods, surgical techniques, and postoperative care, organ transplantation has become an ultimate therapeutic option for irreversible organ failure. Early graft survival has significantly improved; however, the long-term outcome remains unsatisfactory. Multiple factors, both immunogenic and non-immunogenic etiologies, are involved in the deterioration of the allografts, and the recent use of expanded criteria donors to overcome the organ shortage may also contribute to the graft losses. Carbon monoxide (CO) is commonly viewed as a poison in high concentrations due to its ability to interfere with oxygen delivery. However, CO is endogenously produced in the body as a byproduct of heme degradation by the heme oxygenase (HO) and has recently received notable attention as a gaseous regulatory molecule. In fact, an augmentation of endogenous CO by induction of HO-1 or exogenously added CO is known to have potent cytoprotective effects in various disease models. Several recent reports have demonstrated that CO provides potent cytoprotective effects in the field of organ and cell transplantation. CO is able to prevent ischemia/reperfusion injury, allograft rejection, and xenograft rejection via its anti-inflammatory, anti-apoptotic and anti-proliferation effects, suggesting that CO might be a valuable therapeutic option in the field of transplantation. Based on the recent advancement of our understanding of CO as a new therapeutic molecule, this review attempts to summarize the functional roles as well as biological and molecular mechanisms of CO in transplantation and discusses potential CO application to the clinical transplant setting.