Caudal block results in a motor blockade that can reduce abdominal wall tension. This could interact with the balance between chest wall and lung recoil pressure and tension of the diaphragm, which determines the static resting volume of the lung. On this rationale, we hypothesised that caudal block causes an increase in functional residual capacity and ventilation distribution in anaesthetised children. Fifty-two healthy children (15-30 kg, 3-8 years of age) undergoing elective surgery with general anaesthesia and caudal block were studied and randomly allocated to two groups: caudal block or control. Following induction of anaesthesia, the first measurement was obtained in the supine position (baseline). All children were then turned to the left lateral position and patients in the caudal block group received a caudal block with bupivacaine. No intervention took place in the control group. After 15 min in the supine position, the second assessment was performed. Functional residual capacity and parameters of ventilation distribution were calculated by a blinded reviewer. Functional residual capacity was similar at baseline in both groups. In the caudal block group, the capacity increased significantly (p < 0.0001) following caudal block, while in the control group, it remained unchanged. In both groups, parameters of ventilation distribution were consistent with the changes in functional residual capacity. Caudal block resulted in a significant increase in functional residual capacity and improvement in ventilation homogeneity in comparison with the control group. This indicates that caudal block might have a beneficial effect on gas exchange in anaesthetised, spontaneously breathing preschool-aged children with healthy lungs.