Regional anesthesia for laparoscopic cholecystectomy has been reported in patients with severe respiratory disease and is a safe alternative to general anesthesia. Hemodynamic instability can occur on initiating pneumoperitoneum and the respiratory acidosis can last into the post-operative period without careful monitoring and management. This case report describes such an episode in an elderly patient with severely impaired respiratory function who was given thoracic epidural anesthesia for laparoscopic cholecystectomy.