The potential for overdistended alveoli and/or elevated airway pressures to produce or potentiate lung injury has given increase to new ventilatory support strategies. Some of these new approaches incorporate lower tidal volumes and/or limit the peak inflation pressure. The technique termed “permissive hypercapnia” or “controlled hypoventilation” is a strategy that has the primary goals of providing adequate oxygenation and maintaining the end-inspiratory plateau pressure less than or equal to 35 cmH2O in an attempt to avoid the production of alveolar overdistension. Tidal volumes of 5 to 8 mL/kg may be required to achieve these ventilatory goals and may result in subsequent alveolar hypoventilation and respiratory acidosis. Permissive hypercapnia has been reported to be beneficial in the management of patients with acute lung injury and with severe airflow obstruction. This review discusses the potential consequences of hypercapnia and reviews the experimental evidence in support of this ventilatory strategy in the management of acutely ill patients with acute lung injury or severe airflow obstruction.