Shock is deadly and unpredictable if it is not recognized and treated in early stages of hemorrhage. Unfortunately, measurements of standard vital signs that are displayed on current medical monitors fail to provide accurate or early indicators of shock because of physiological mechanisms that effectively compensate for blood loss. As a result of new insights provided by the latest research on the physiology of shock using human experimental models of controlled hemorrhage, it is now recognized that measurement of the body's reserve to compensate for reduced circulating blood volume is the single most important indicator for early and accurate assessment of shock. We have called this function the “compensatory reserve,” which can be accurately assessed by real-time measurements of changes in the features of the arterial waveform. In this paper, the physiology underlying the development and evaluation of a new noninvasive technology that allows for real-time measurement of the compensatory reserve will be reviewed, with its clinical implications for earlier and more accurate prediction of shock.