Stereotactic body radiation therapy (SBRT) has quickly become a preferred treatment option for early-stage lung cancer patients who are ineligible for surgery. This technique uses tightly conformed megavoltage (MV) x-ray beams to irradiate a tumour with ablative doses in only a few treatment fractions. Small high energy x-ray fields can cause lateral electron disequilibrium (LED) to occur within low density media, which can reduce tumour dose. These dose effects may be challenging to predict using analytic dose calculation algorithms, especially at higher beam energies. As a result, previous authors have suggested using low energy photons (<10 MV) and larger fields (>5 × 5 cm2) for lung cancer patients to avoid the negative dosimetric effects of LED. In this work, we propose a new form of SBRT, described as LED-optimized SBRT (LED-SBRT), which utilizes radiotherapy (RT) parameters designed to cause LED to advantage. It will be shown that LED-SBRT creates enhanced dose gradients at the tumour/lung interface, which can be used to manipulate tumour dose, and/or normal lung dose. To demonstrate the potential benefits of LED-SBRT, the DOSXYZnrc (National Research Council of Canada, Ottawa, ON) Monte Carlo (MC) software was used to calculate dose within a cylindrical phantom and a typical lung patient. 6 MV or 18 MV x-ray fields were focused onto a small tumour volume (diameter ∼1 cm). For the phantom, square fields of 1 × 1 cm2, 3 × 3 cm2, or 5 × 5 cm2 were applied. However, in the patient, 3 × 1 cm2, 3 × 2 cm2, 3 × 2.5 cm2, or 3 × 3 cm2 field sizes were used in simulations to assure target coverage in the superior–inferior direction. To mimic a 180° SBRT arc in the (symmetric) phantom, a single beam profile was calculated, rotated, and beams were summed at 1° segments to accumulate an arc dose distribution. For the patient, a 360° arc was modelled with 36 equally weighted (and spaced) fields focused on the tumour centre. A planning target volume (PTV) was generated by considering the extent of tumour motion over the patient's breathing cycle and set-up uncertainties. All patient dose results were normalized such that at least 95% of the PTV received at least 54 Gy (i.e. D95 = 54 Gy). Further, we introduce ‘LED maps’ as a novel clinical tool to compare the magnitude of LED resulting from the various SBRT arc plans. Results from the phantom simulation suggest that the best lung sparing occurred for RT parameters that cause severe LED. For equal tumour dose coverage, normal lung dose (2 cm outside the target region) was reduced from 92% to 23%, comparing results between the 18 MV (5 × 5 cm2) and 18 MV (1 × 1 cm2) arc simulations. In addition to reduced lung dose for the 18 MV (1 × 1 cm2) arc, maximal tumour dose increased beyond 125%. Thus, LED can create steep dose gradients to spare normal lung, while increasing tumour dose levels (if desired). In the patient simulation, a LED-optimized arc plan was designed using either 18 MV (3 × 1 cm2) or 6 MV (3 × 3cm2) beams. Both plans met the D95 dose coverage requirement for the target. However, the LED-optimized plan increased the maximum, mean, and minimum dose within the PTV by as much as 80 Gy, 11 Gy, and 3 Gy, respectively. Despite increased tumour dose levels, the 18 MV (3 × 1 cm2) arc plan improved or maintained the V20, V5, and mean lung dose metrics compared to the 6 MV (3 × 3 cm2) simulation. We conclude that LED-SBRT has the potential to increase dose gradients, and dose levels within a small lung tumour. The magnitude of tumour dose increase or lung sparing can be optimized through manipulation of RT parameters (e.g. beam energy and field size).