PEEP has become a widely used ventilatory technique. The beneficial effects of PEEP were first described in asphyctic neonates, and it was later used in the treatment of cardiogenic pulmonary edema. Since the 1970s PEEP has been well established for the treatment of ARDS; the technique is also used for scoring the degree of severity of ARDS. Two mechanisms have been identified to explain pulmonary function and gas exchange following PEEP therapy: increasing FRC and alveolar recruitment. Both factors result in improvement in the ventilation/perfusion ratio with a consequent decrease in the intrapulmonary right-to-left shunt fraction. PEEP should be used in cardiogenic pulmonary edema as well as in ARDS; there are few contraindications. To choose the individual level of PEEP, PEEP should be titrated in 3- to 5-cm increments and its effects on haemodynamic function, pulmonary gas exchange and respiratory mechanics taken into account. In this article the effects of PEEP, its use and abuse are reviewed from a practical point of view.