Failure to objectively assess the effect of digitalis on exercise capacity has resulted in controversy regarding its use in patients with chronic congestive heart failure. To clarify this situation, maximal treadmill testing with respiratory gas exchange analysis was performed on 11 patients (mean age 57 ± 9 years) with chronic congestive heart failure with and without digoxin therapy. Ten of the 11 had a consistent third sound gallop, and the mean ejection fraction of the group was 24 ± 10%. Rest heart rate was significantly higher (91 ± 16 versus 102 ± 16 beats/min; p < 0.05) and rest systolic blood pressure was significantly reduced in the absence of digoxin (130 ± 23 versus 121 ± 15 mm Hg; p < 0.05). No differences in heart rate or blood pressure were observed during exercise. Significant increases in ventilatory oxygen uptake were observed with digoxin submaximally (3.0 mph, 0% grade), at the gas exchange anaerobic threshold and at maximal exercise (mean increase of 2.6 ml/kg per min; p < 0.02). An improvement in the estimated ratio of ventilatory dead space to tidal volume (VD/VT), an index of physiologic efficiency, occurred throughout exercise during digoxin therapy, and there was a significant negative correlation between the change in maximal oxygen uptake and change in maximal estimated VD/VT (r = -0.63; p < 0.05). Thus, digoxin therapy is associated with a significant improvement in exercise capacity in patients with chronic heart failure, most likely due to an improved matching of ventilation to perfusion.