Changes in absolute lung volumes are common in lung disease and result in significant impacts on gas exchange, respiratory muscle function, the sensation of dyspnoea, and limitations to maximal exercise. Though our knowledge regarding the magnitude and determinants of changes in lung volumes in health and disease has increased in the past 20 years, a number of important questions remain unanswered. Consideration of the limitations of specific methods for measuring lung volumes is essential when analysing published studies regarding absolute lung volumes in infants, children and adults. Though functional residual capacity is most commonly measured in children and adults with the subject awake and at rest, increasingly attention is being directed to making these measurements under clinically more relevant conditions (e.g. during exercise, sleep, anesthesia, or mechanical ventilation). The relationships between dynamic changes in functional residual capacity, flow limitation during tidal breaths, sensation of dyspnoea and exercise limitation are important to understand, and are the focus of current and future research. Improved understanding of these relationships may lead to improvements in therapy of patients with acute and chronic lung disease and are likely to be particularly important for evaluating the efficacy of and optimal patient selection for new modes of therapy, such as lung volume reduction surgery.