In vivo near-infrared (NIR) spectroscopy has the potential of becoming an important tool in a number of areas in clinical medicine. Technological developments in photonics that have been spurred on by the communication revolution have set the stage for rapid advancement of optical and NIR spectroscopy based on noninvasive or minimally invasive medical diagnostic techniques. The goal of this article is to review the current capabilities and limitations of in vivo NIR spectroscopy and highlight the impact of these capabilities and limitations in selected areas where NIR spectroscopy is being used to address clinical problems. The optical properties of tissues are briefly reviewed, as are the instrumental methods available to the experimentalist. These properties and methods largely dictate the feasibility of an in vivo spectroscopic diagnostic approach and constrain the scope of problems that can be tackled using optical–NIR spectroscopy. Some of the more successful applications are described, including studies of tissue oxygenation, ischemia, and viability. A number of factors that can confound interpretation of in vivo NIR results are discussed. The number and magnitude of confounding influences that arise in in vivo spectroscopy can be daunting to the experimentalist and may represent the largest barrier in transforming in vivo spectroscopic measurements into clinically meaningful and reliable information. In vivo NIR spectroscopy abounds with opportunity and challenge.