Isothermal rebreathing has been proposed as an experimental technique for estimating the alveolar levels of hydrophilic volatile organic compounds (VOCs) in exhaled breath. Using the prototypic test compound acetone we demonstrate that the end-tidal breath profiles of such substances during isothermal rebreathing show characteristics that contradict the conventional pulmonary inert gas elimination theory due to Farhi. On the other hand, these profiles can reliably be captured by virtue of a previously developed mathematical model for the general exhalation kinetics of highly soluble, blood-borne VOCs, which explicitly takes into account airway gas exchange as major determinant of the observable breath output. This model allows for a mechanistic analysis of various rebreathing protocols suggested in the literature. In particular, it clarifies the discrepancies between in vitro and in vivo blood-breath ratios of hydrophilic VOCs and yields further quantitative insights into the physiological components of isothermal rebreathing.