Paroxysmal nocturnal hemoglobinuria (PNH) is an acquired hemolytic anemia caused by the expansion of a hematopoietic progenitor cell that has acquired a mutation in the X-linked PIGA gene. PNH occurs on the background of bone marrow failure. Bone marrow failure and the presence of the abnormal cells account for the clinical phenotype of patients with PNH including hemolysis, cytopenia, and thrombophilia. PIGA is essential for the synthesis of glycosyl phosphatidylinositol (GPI) anchor molecules. PNH blood cells are therefore deficient in all proteins that use such an anchor molecule for attachment to the cell membrane. Two of these proteins regulate complement activation on the cell surface. Their deficiency therefore explains the exquisite sensitivity of PNH red blood cells to complement-mediated lysis. Complement-mediated lysis of red blood cells is intravascular, and intravascular hemolysis contributes significantly to the morbidity and mortality in patients with this condition. PNH is an outstanding example of how an increased understanding of pathophysiology may directly improve the diagnosis, care, and treatment of disease.