We study gas exchange and hemodynamic repercussions during pediatric laparoscopic surgery. We provided balanced anesthesia with muscle relaxation while ventilation was maintained with FiO2 at 0.4 and flow volume between 10-15 ml/kg-1 during abdominal laparoscopic procedures performed in 10 ASA I-II children (4-14 years). Pneumoperitoneum was produced with CO2 insufflated up to a pressure of 15 mmHg. Airways pressure (PIP), PaO2, PaCO2, heart rate (HR), systolic arterial pressure (SAP) and diastolic arterial pressure (DAP) were measured before insufflation and 5, 30 and 60 minutes afterwards. We calculated the ratio of dead space to flow volume (VD/VT), thoracic distensibility and metabolic production of CO2 (VCO2). Insufflation caused an immediate reduction (29-33%) in dynamic thoracic distensibility (p = 0.0004), but no hypoventilation or increases in VD/VT. The decrease in PaO2 was small (5-6%) but statistically significant (p = 0.0188). Hypercapnia (14-21%) was due to an increase in VCO2 caused by gradual peritoneal absorption of CO2 (24-32%, p = 0.0013). We also found increases in SAP (10%, p = 0.02) and DAP (32%, p = 0.0001) at 5 min, along with an increase in HR (8%, p = 0.0163) at 60 min. Arterial CO2 levels were held within physiological limits by compensatory hyperventilation (+25% of physiological VT). Capnography proved to be an excellent guide. Any clinical repercussion of hemodynamic effects was blocked by a dose of atropine given before insufflation and by the excess loading volume (10 ml/kg of crystalloids). Laparascopic surgery in children diminishes thoracic distensibility and causes hypercapnia, making it necessary to measure PefCO2 to regulate ventilation.