Hypoxemia is common during various endoscopic procedures and may result from a variety of causes. These causes range from benign and otherwise easily reversible events like oversedation to potentially life threatening complications such as pneumothorax. Although pneumothorax has been reported secondary to gastrointestinal perforation as a complication of various therapeutic endoscopic procedures, there has been no report of pneumothorax without perforation. We report a case of a patient who developed severe hypoxemia and hemodynamic instability during diagnostic upper endoscopy as a result of pneumomediastinum and tension pneumothorax in the absence of any signs of gastrointestinal perforation and comment on various possible mechanisms. Immediate endotracheal intubation and bilateral chest tube placement resulted in prompt return of the patient's oxygenation and vital signs back to normal. This report enlarges the list of possible causes of hypoxemia during endoscopy and shows the importance of early and prompt recognition, which allowed directed therapy with a good outcome.