iTerm2 hide/show like Guake

As of iTerm 3.1.x and up, achieving the Guake effect is much easier since a lot of these items have been moved to their dedicated submenus. There are two methods that you can use (separately or simultaneously) that you can choose that will best suit your needs. Both of these methods can be accessed at Preferences > Keys > Hotkey:

1. Dedicated HotKey Window: Automatically creates the Hotkey Window and displays the preferences for the profile. This is the same as Profiles > {Profile Name} > Keys > Hotkey Window and selecting A hotkey opens a dedicated window with this profile. This option will display an isolated instance of iTerm instead of everything that was previously open.

2. Show/hide all windows with a system-wide hotkey: As the name suggests, this shows / hides everything iTerm, including the Preferences window. The advantage of setting this hotkey is to quickly access all of your iTerm windows when you have the Exclude from Dock option selected. Note: Not sure if this is a bug or a preference, but if your Preferences window is open and iTerm loses focus, the first time you input the hotkey combo only brings the latest active Profile. Pressing two more times brings back the Preferences window.

Folks at iTerm have also made it simpler to access Exclude from Dock setting. Simply head over to Appearance > General and find the option Exclude from Dock at the bottom.

This will provide you with a pretty nifty Menu Bar Icon from which you can also access your Settings or Bring All Windows to Front.

As Ron mentioned in his answer, the "hotkey window" feature has got you covered.

After installing iTerm2, check that you have two profiles in the Profiles > Open Profiles panel: one called "Default" and one called "hotkey window".

If you don't have the "Hotkey Window" profile listed in the profile settings:

1. Open iTerm2 > Preferences and go to the Keys tab.
2. Locate the hotkey window options in the bottom left of the Preferences dialog.
3. Ensure that both the "Show/hide iTerm2 with a system-wide hotkey" and the "Hotkey toggles a dedicated window with profile" checkboxes are checked/marked. This should create the "Hotkey Window" profile for you automatically.
4. Set the hotkey you want to use in the Input Box (I have it set to CRTL-^, just cuz it reminds me of the old Quake II times) and select Hotkey Window as the profile to show and hide in the dropdown list.

5. Enjoy!

   This answer in the Ask Different community illustrates the above steps.

Additionally Nishchal Gautam asks, as a comment to Ron's answer, if you can hide apps from the command + tab listing of apps running. Too bad I don't have enough reputation to place this response as a direct comment to the current answer, but here is the answer: iTerm2 supports this as part of it's "Advanced" options:

There's also an answer to that question in the Ask different community, to do it manually. Both options achieve the same, the former being the easy way.

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Note: I'm just adding this new answer with the link for a more complete reference because, in comparison with Rob's answer, it states very clear that you need to tick both check boxes and select the "hotkey window" profile in the dropdown list at the bottom for the feature to fully enable the functionality - the link is a bit clearer than Ron, if you ask me: he does indeed mention everything you need to get going, but I had issues understanding the wording and had to further search why my settings weren't properly configured. That link made me realize that I overlooked the second checkbox. Silly me and my lame reading comprehension skills.

Note2: I just figured out that Ron's answer doesn't cover the most common case for when you don't have the profile already created. I've sent an edit request.

As of early 2020, after a little frustration while looking for it in the old place... I've found the hotkey in yet another place in preferences:

The latest version of Iterm2 does this almost out of the box.

After installing it, check that you have 2 profiles, one called Default and one called hotkey window. If you have to go to the Keys tab, select the hotkey you want to use (I have it set to CTRL+~) and select the hotkey window as the profile to show and hide.