Percutaneous dilatational tracheostomy (PDT) is fast becoming the method of choice for securing an airway in chronic ventilated patients in intensive care units worldwide. It has been advocated as a safe and efficient bedside alternative for open surgical tracheostomy [1,2]. Most of the complications reported with different PDT techniques are mild and easy to overcome, but some major, life-threatening complications like pneumotho rax, pneumomediastinum, subcutaneous emphysema, cardiovascular compromise have been reported as well. Our patient was 50 years old female, weighing 84 kg, with diagnosis of right hand marjolin’s ulcer with emphysema and respiratory failure. Bedside PDT with ULTRAperc (Smith Medical, Hythe, Kent, UK) single stage dilator technique was planned, as she was on ventilator support for 11 days and was a difficult case to wean. After all aseptic precautions and local anesthetic infiltration, procedure was started under fiberoptic bronchoscope (FOB) guidance. Standard technique for PDT was followed; FOB was inserted through a special T connector up to the level of carina. After dilatation of the tracheal stoma, when the tracheostomy tube was inserted, end-tidal carbon dioxide trace was detected in the beginning but soon thereafter no vis ible chest rise was observed and on auscultation of the chest, no breath sounds were heard. The patient was immediately connected to the endotracheal tube, which was still lying in the oral cavity just below the vocal cords, still there was no visible chest rise and compliance of the chest was very poor. Patient also developed desaturation upto SPO2 of 88%, bradycardia and hypotension. Cardiopulmonary resuscitation was started. Possibility of pneumothorax was thought upon and 16 gauge intravenous cannula with three way assembly leading to water seal was inserted in the left second intercostal space as decrease in breath sounds were more predominant on left side. There was a sudden gush of air. There was also air crepitus on palpation in the neck and chest wall on palpation. Intercostal drain was put on left side in fifth intercostal space along the midclavicular line. Then, tracheostomy was completed under bronchoscopic visu alisation and 7 mm internal diameter tracheostomy tube was put into the stoma. Position was confirmed using, capnography, chest auscultation and fiberoptic bronchoscopy. The patient was also started on inotropic support and vitals improved gradually. No evidence of tracheal wall injury was found even on repeated bronchoscopy. The pneumothorax that occurred in this case could have been caused either by a false passage formation or by rupture of emphysematous bullae as a result of an increase in peak airway pressure and/ or air trapping. The dynamic hyper inflation of lungs and air trapped in the thorax and mediastinum could be implicated in decreasing the venous return and thereby causing hemodynamic compromise in the form of hypotension, bradycardia and near cardiac arrest.