Early experience suggests that lung volume reduction surgery improves exercise tolerance as measured by the 6-min walk distance in patients with emphysema. To identify the physiologic mechanism(s) by which lung volume reduction surgery improved exercise, we performed progressive cardiopulmonary exercise testing, including rest and peak exercise blood gas determinations, on 21 consecutive patients before and 3 mo after lung volume reduction surgery. Maximal work (median, range, % change) increased 17.5 watts (-13 to +44 watts, 46%, p < 0.05), maximal oxygen consumption increased 0.16 L/min (-0.17 to +0.48, 25%, p < 0.05), maximal ventilation increased 6.6 L/min (-7 to +26 L/min, 27%, p < 0.05), and the dead space/tidal volume ratio at peak exercise decreased 0.07 (-0.22 to +0.09, 12%, p < 0.05), exclusively as a result of an increase in the tidal volume. After lung volume reduction surgery heart rate decreased at the point of isowatt exercise, from 115 to 111 beats/min (p < 0.05). No difference was observed in the other physiologic variables measured at isowatt exercise. In 13 patients exercised while breathing room air, the alveolar-to-arterial O2 difference increased, and the arterial O2 tension decreased from rest to peak exercise both before and after the operation, but significant changes in this response were not observed after surgery. The primary problem limiting exercise performance in these patients was the limited ventilatory capacity as 16 and 13 of the 21 subjects developed acute respiratory acidemia at peak exercise before and after surgery, respectively. Lung volume reduction surgery in patients with severe emphysema improved maximal ventilation, thereby improving maximal exercise performance.