Diatom silica is a form of biogenic opal (SiO₂·nH₂O) that contains oxygen isotopes that can be used in lacustrine and marine paleoenvironmental studies. Here we describe the various analytical considerations and methodologies to achieve good environmental signals. We describe diatom oxygen isotope systematics - in particular, the mineral-water temperature fractionation and silica maturation processes. Finally we give examples of studies both in lake and ocean environments. We conclude that diatom δ¹⁸O in sediments can be an extremely useful indicator of paleoenvironmental change and tends to be most successful in areas where there are likely to have been large changes in the isotope composition of the host water. In lakes this can be due to changes in the precipitation/evaporation balance, or source of precipitation, and in oceans it can be due to variations in meltwater flux. The change in δ¹⁸O_diatom due to these factors is normally greater than temperature and methodological errors.