The term permissive hypercapnia defines a ventilatory strategy for acute respiratory failure in which the lungs are ventilated with a low inspiratory volume and pressure. The aim of permissive hypercapnia is to minimize lung damage during mechanical ventilation; its limitation is the resulting hypoventilation and carbon dioxide (CO2) retention. In this article we discuss the rationale, physiologic implications, and implementation of permissive hypercapnia. We then review recent clinical studies that tested the effect of various approaches to permissive hypercapnia on the outcome of patients with acute respiratory failure.