Controversy persists over the efficacy of intercostal nerve block administered through a tunnelled extrapleural catheter. We have undertaken a randomized, prospective double-blind trial of two different local anaesthetic regimes to evaluate the effect of this technique on post-thoracotomy pain relief and pulmonary function. Sixty-eight patients were randomized to receive bupivacaine 0.25% (n = 22), lignocaine 1% (n = 21) or 0.9% NaCl (saline) (n = 20) via an extrapleural catheter, inserted peroperatively. All patients underwent a standard posterolateral thoracotomy. Pain was assessed using a visual analogue pain score and by the requirement for opiate analgesia. Pulmonary function was measured using bedside spirometry. Pain scores were lower in the local anaesthetic groups at 24, 32 and 72 h compared with placebo (P < 0.05) and the total amount of opiate required was less than placebo for both lignocaine and bupivicaine (P < 0.05). Pulmonary function was better in the local anaesthetic groups throughout the post-operative period and was most pronounced at 24 h with a mean improvement of 30% for forced expiratory volume (FEV1), 24% for forced vital capacity (FVC) and 19% for peak expiratory flow rate (PEFR) compared with placebo. There was no significant difference between pain scores, opiate requirement or pulmonary function between lignocaine and bupivicaine. CT scanning demonstrated containment of the local anaesthetic in an extra-pleural tunnel. Extra-pleural infusion of local anaesthetics is a simple technique, with low risk of complications and provides effective pain relief as well as an improvement in post-operative pulmonary function. Lignocaine is equally as effective as bupivacaine and its use would result in some cost-saving.