Indocyanine green (ICG) dilution technique (DT) is frequently used for plasma volume (PV) measurement. However, due to an inadequate knowledge about the properties of this dye, the method has been blamed to lack accuracy. This article aims to provide physiological background information about ICG-DT to avoid some profound misunderstandings. When performing tracer dilution, one has to consider the tracer's distribution space before interpreting the result. For ICG, the distribution space is the total PV, i.e., the circulating part plus the non-circulating part, fixed within the endothelial glycocalyx. The distribution space of red blood cells and large molecules, in contrast, is only the circulating part of PV. Therefore, it is erroneous to compare directly PV derived from different tracer dilution methods. The transcapillary escape rate of ICG should not relevantly influence measured PV if the method is performed properly, i.e., if a short time window of measurement is subjected to monoexponential extrapolation. A major problem of PV measurement in general is that the target itself is very inconstant. Thus, checking for constancy of ICG-DT with two consecutive measurements is untrustworthy. Nevertheless, ICG-DT is a useful tool for determining PV, provided it is well understood by the investigator to enable correct interpretation of the results.