Congenital lobar emphysema (CLE) or congenital lobar over inflation is a rare pulmonary anomaly that causes respiratory distress in neonates. CLE presents significant challenges in diagnosis and management. We reported a case of two-month old infant with respiratory distress and pneumonia related to CLE affecting the left upper lobe. Lobectomy was performed under general anaesthesia with spontaneous and controlled lung Ventilation. The case was challenging, as it involved careful and planned anaesthetic management of lung separation as well as prevention of hyperventilation of the un-involved lung.