Atelectasis occurs in the dependent parts of the lungs of most patients who are anesthetized. Development of atelectasis is associated with decreased lung compliance, impairment of oxygenation, increased pulmonary vascular resistance, and development of lung injury. The adverse effects of atelectasis persist into the postoperative period and can impact patient recovery. This review article focuses on the causes, nature, and diagnosis of atelectasis. The authors discuss the effects and implications of atelectasis in the perioperative period and illustrate how preventive measures may impact outcome. In addition, they examine the impact of atelectasis and its prevention in acute lung injury.