BACKGROUND The diffusion capacity of the lung for carbon monoxide (DLCO) is a good marker of disease severity in patients with idiopathic interstitial pneumonia, and is associated with oxygen saturation; however, little is known about DLCO in systemic sclerosis patients with interstitial lung disease. We studied potential predictors of exercise-induced oxygen desaturation in patients with systemic sclerosis. METHODS Data were collected prospectively from 80 of 110 consecutive systemic sclerosis patients with normal oxygen saturation (> 95%) at rest, who could perform the 6-min walk test without physical discomfort, including leg pain. Pulmonary function tests and echocardiography were collected from all subjects. RESULTS Thirty subjects showed a ≥ 4% decline in oxygen saturation during the 6-min walk test (desaturation group). The other subjects were assigned to the normoxic group. The percent-of-predicted values for FVC, FEV1, total lung capacity, DLCO, and DLCO/alveolar volume were lower, and FEV1/FVC was higher, in the desaturation group. Logistic regression analysis showed the percent-of-predicted DLCO as a highly accurate predictor of exercise-induced oxygen desaturation: the area under the receiver operating characteristic curve was 0.92 (cutoff point 56.3%, sensitivity 0.83, specificity 0.86). Five subjects over the cutoff point of the percent-of-predicted DLCO in the desaturation group could not be distinguished from the normoxic subjects with the lung-volume measurements or right-ventricular systolic pressure. CONCLUSIONS The factor underlying exercise-induced oxygen desaturation appeared to be reduced percent-of-predicted DLCO, which was useful as a predictor in over 80% of the subjects.