Routine use of supplemental oxygen (O2) in the post-anesthesia care unit (PACU) traditionally has been used to minimize the incidence of hypoxemia. However, with the advent of continuous noninvasive monitoring by pulse oximetry, is routine administration of O2 necessary? We hypothesized that administering O2 as needed, based on pulse oximetry data, would effect considerable cost savings without compromising patient care. Five hundred adult (≥18 yr) patients breathing room air when arriving in the PACU were enrolled in the study. During PACU care, when O2 saturation (Spo2) was continuously more than 94%, no supplemental O2 was given. When Spo2 was less than 94%, supplemental O2 was given at an inspired O2 concentration (Fio2) that would increase it to above 94%. Also, when preoperative Spo2 was less than 94% and postoperative Spo2 was more than the preoperative Spo2 no supplemental O2 was given. Supplemental O2 was unnecessary in 63% of patients for the duration of their PACU stay. Cost savings to the 307 patients in one study not receiving O2 was $ 31,928 if it had been billed separately from the PACU global charge. The annualized figure for patients in our hospital (approximately 10,000 cases) would be an additional $ 623,272. Inasmuch as pulse oximetry monitoring is now standard in the PACU, perhaps it is time to apply the objective data it supplies, thereby creating cost savings while maintaining patient care standards.