Chronic hypoxia leads to adaptations in the respiratory system manifested as a persistent increase in resting ventilation, termed ventilatory acclimatization to hypoxia (VAH). Increased afferent nerve activity from carotid bodies and the ensuing reflex activation of ventilation are critical for eliciting VAH. In this review we highlight recent information on the cellular and molecular mechanisms associated with chronic hypoxia-induced functional and structural changes in the carotid body. Chronic hypoxia leads to hypersensitivity of the carotid bodies and induces morphological changes, including enlargement of the organ, hyperplasia of glomus cells, and neovascularization. Enhanced hypoxic sensitivity is due to alterations in ion current densities, as well as changes in neurotransmitter dynamics and recruitment of additional neuromodulators (endothelin- 1, ET-1) in glomus cells. Morphological alterations are in part due to upregulation of growth factors (e.g., VEGF). VAH is markedly attenuated in mice partially deficient in HIF-1 transcription factor, which regulates several downstream genes, including VEGF, ET-1, and Ca(2+) channels. The finding that VAH is also blunted in mice deficient in the fosB gene led to the suggestion that the magnitude and time course of VAH depend on complex interactions between more than one transcription factor, resulting in coordinated regulation of several downstream genes and their protein products.