With growing numbers of patients with acute coronary syndromes undergoing catheterization without prior non-invasive imaging and the increasing numbers of patients with angiographic multivessel coronary artery disease, complementary physiologic lesion assessment for directing revascularization is of increasing value. Fractional flow reserve (FFR) has emerged as a simple, reliable, and reproducible physiologic index of lesion severity. In concert with coronary flow reserve, FFR yields significant information about the epicardial artery and the microvascular bed it subtends. This review will critically consider the theory of FFR measurements in the context of recent insights into coronary hemodynamics and how FFR measurements are significantly affected by microvascular disease states such as myocardial infarction, left ventricular hypertrophy, or diabetes mellitus. Clinical studies have demonstrated the usefulness of FFR for the assessment of intermediate lesions in single-vessel, multivessel, and possibly left main disease. In addition, measurement of fractional collateral flow reserve during angioplasty and FFR after stent deployment have prognostic value for major adverse cardiac events after percutaneous intervention. Furthermore, with economic concerns about the appropriate use of drug-eluting stents, FFR assessment can be used to direct percutaneous coronary intervention only to flow-limiting lesions and to achieve optimal stent deployment. Therefore, FFR represents a powerful new tool in the cardiologists' arsenal in the cardiac catheterization laboratory.