A variety of stable isotope labeling techniques have been developed and used in mass spectrometry (MS)-based proteomics, primarily for relative quantitation of changes in protein abundances between two compared samples, but also for qualitative characterization of differentially labeled proteomes. Differential (16)O/(18)O coding relies on the (18)O exchange that takes place at the C-terminal carboxyl group of proteolytic fragments, where two (16)O atoms are typically replaced by two (18)O atoms by enzyme-catalyzed oxygen-exchange in the presence of H(2)(18)O. The resulting mass shift between differentially labeled peptide ions permits identification, characterization and quantitation of proteins from which the peptides are proteolytically generated. This review focuses on the utility of (16)O/(18)O labeling within the context of mass spectrometry-based proteome research. Different strategies employing (16)O/(18)O are examined in the context of global comparative proteome profiling, targeted subcellular proteomics, analysis of post-translational modifications and biomarker discovery. Also discussed are analytical issues related to this technique, including variable (18)O exchange along with advantages and disadvantages of (16)O/(18)O labeling in comparison with other isotope-coding techniques.