Hydrogen peroxide (H2O2) is a well-documented component of living cells. It plays important roles in host defense and oxidative biosynthetic reactions. In addition there is growing evidence that at low levels, H2O2 also functions as a signaling agent, particularly in higher organisms. This review evaluates the evidence that H2O2 functions as a signaling agent in higher organisms in light of the known biology and biochemistry of H2O2. All aerobic organisms studied to date from prokaryotes to humans appear to tightly regulate their intracellular H2O2 concentrations at relatively similar levels. Multiple biochemical strategies for rapidly reacting with these low endogenous levels of H2O2 have been elucidated from the study of peroxidases and catalases. Well-defined biochemical pathways involved in the response to exogenous H2O2 have been described in both prokaryotes and yeast. In animals and plants, regulated enzymatic systems for generating H2O2 have been described. In addition oxidation-dependent steps in signal transduction pathways are being uncovered, and evidence is accumulating regarding the nature of the specific reactive oxygen species involved in each of these pathways. Application of physiologic levels of H2O2 to mammalian cells has been shown to stimulate biological responses and to activate specific biochemical pathways in these cells.