Multicenter long-term oxygen therapy trials have established that low-flow oxygen is beneficial to hypoxemic patients with chronic obstructive pulmonary disease (COPD). A large percentage of these patients receive oxygen via steady-flow nasal cannula (SNC). Because of the rising cost of medical care and particularly the cost of oxygen therapy, we designed an oxygen-conserving nasal cannula (CNC). In a previous study, we demonstrated by ear oximetry that the CNC required substantially less oxygen to achieve adequate oxygen saturation than did the SNC. In this paper we describe the principles of operation of the CNC and present data comparing the CNC and SNC. Methods: We studied 4 subjects with COPD, simultaneously measuring SaO2 by ear oximetry and SaO2 and PaO2 by standard blood analysis, with the subjects breathing first room air and then supplemental oxygen at 0.5, 1.0, and 2.0 L/min with both the SNC and CNC. Ten minutes was allowed between tests for equilibration. Results: The CNC achieved significantly higher (P < 0.001) saturations than did the SNC at equivalent oxygen supply flows. Absolute improvements in PaO2 were 10.9 torr at 0.5 L/min, 18.2 torr at 1.0 L/min, and 27 torr at 2 L/min. There was a high correlation between ear oximetry and blood analysis readings. Conclusion: We conclude that the widespread use of the CNC could result in a significant financial savings while increasing the range and portability of oxygen therapy devices. (Respir Care 1985;30:19-25.)