Eleven patients with acute respiratory failure due to diffuse, bilateral lung disease were treated according to a new ventilation concept. The patients were intubated with a double-lumen catheter and positioned in the lateral decubital posture. With two synchronized ventilators, each lung received half of the tidal volume (VT), in accordance with its presumed perfusion (differential ventilation—DV), and the end-expiratory pressure was increased locally in the dependent lung (selective PEEP). DV with and without selective PEEP was compared with conventional ventilation with free distribution of VT, with and without PEEP applied to both lungs. The major findings were that DV with a selective PEEP of 12 cmH2O to the dependent lung decreased venous admixture by 38% (P< 0.01) in comparison with conventional ventilation with no PEEP. Furthermore, it was found that selective PEEP, in contrast to general PEEP, had no deleterious effect on cardiac output. Consequently, DV with selective PEEP increased arterial oxygen tension by 23% (P< 0.05) compared with general PEEP and by 46% (P< 0.001) in comparison with conventional ventilation with no PEEP.