General anaesthesia can affect every aspect of ventilation. It produces dose dependent depression of control of respiration. Carbon dioxide response curve is shifted to the right. Muscle tone is reduced and the airway can get obstructed. One of the most prominent changes is reduction in functional residual capacity (FRC) with the adoption of supine function and induction of anaesthesia. The closing capacity increases with age. The atelectasis that occurs consequent to the fall in FRC and increasing age is compounded by the use of high concentrations of oxygen, cephalad movement of the diaphragm, residual effect of muscle relaxants and inadequate analgesia after thoracic or abdominal surgery. One of the important causes of ventilation perfusion mismatch during anaesthesia is atelectasis. This has been shown to contribute to hypoxia as well as increased postoperative pulmonary complications. A lot of research is being conducted as to reduce the effects of atelectasis during anaesthesia, including the best ventilator strategy during anaesthesia. Most inhalation anaesthetics are good bronchodilators. Inhalation anaesthetics depress hypoxic pulmonary vasoconstriction (HPV) beyond 1 MAC. The movement of ciliary movements is reduced with the use of dry gases. All these can increase postoperative pulmonary complications which are important causes of postoperative morbidity. Appropriate preoperative preparation has to be combined with optimal management of ventilation intraoperatively to minimise postoperative pulmonary complications. The role of lower tidal volume, use of positive end-expiratory pressure, limiting oxygen concentrations and the utility of recruitment manoeuvres are increasingly being recognised and have been the topics of recent research.