Tracheomalacia (TM) is abnormal flaccidity of the trachea caused by inadequate cartilaginous support by the C-shaped tracheal rings. This defect generally results in various degrees of dynamic narrowing of the airway lumen. TM usually presents with expiratory stridor, wheeze, and respiratory obstruction. TM is usually associated with tracheoesophageal fistula and esophageal atresia or with other thoracic lesions of vascular rings and tumors. We report a well-documented case of a 20-month-old boy who presented to our institution with a severe history of obstructive sleep apnea and adenotonsillar hypertrophy. On direct laryngoscopy/bronchoscopy, severe TM was noted. Tonsillectomy and adenoidectomy was performed, and by the 37th postoperative day, the TM had completely resolved. We review the literature, discuss the differential diagnosis and clinical evaluation, and propose a new pathophysiological mechanism by which obstructive sleep apnea causes TM.