Transcutaneous pulse oximetry is increasingly being used to supplant arterial blood gas measurement as a means to monitor oxygenation. Previous studies have demonstrated that, despite inadequate ventilation, oxygenation can be maintained during delivery of supplemental oxygen by a process known as diffusion respiration. In this setting, severe hypercapnia and acidosis rapidly develop. This case report demonstrates that pulse oximetry is an unreliable means to monitor adequacy of ventilation. A 75-year-old woman in good health suffered a fracture of the right hip that necessitated arthroplasty. During postoperative recovery, she remained unresponsive while receiving 100% oxygen through an endotracheal tube; mechanical ventilation was not used. Pulse oximetry indicated a blood oxygen saturation of 94 to 96%; however, results of blood gas studies 3 1/2 hours postoperatively revealed profound hypercapnia (arterial carbon dioxide tension, 265 mm Hg) and acidosis (pH, 6.65) but confirmed normal oxygen levels (arterial oxygen tension, 213 mm Hg). Assisted ventilation resulted in normalization of the blood gases and an improved level of consciousness. The patient was then transferred to Mayo Clinic Rochester and had an uneventful recovery.