Abstract Introduction Diaphragm weakness induced by prolonged mechanical ventilation may contribute to difficult weaning from the ventilator. Hypercapnia is an accepted side effect of low tidal volume mechanical ventilation, but the effects of hypercapnia on respiratory muscle function are largely unknown. The present study investigated the effect of hypercapnia on ventilator-induced diaphragm inflammation, atrophy and function. Methods Male Wistar rats (n = 10 per group) were unventilated (CON), mechanically ventilated for 18 hours without (MV) or with hypercapnia (MV + H, Fico2 = 0.05). Diaphragm muscle was excised for structural, biochemical and functional analyses. Results Myosin concentration in the diaphragm was decreased in MV versus CON, but not in MV + H versus CON. MV reduced diaphragm force by approximately 22% compared with CON. The force-generating capacity of diaphragm fibers from MV + H rats was approximately 14% lower compared with CON. Inflammatory cytokines were elevated in the diaphragm of MV rats, but not in the MV + H group. Diaphragm proteasome activity did not significantly differ between MV and CON. However, proteasome activity in the diaphragm of MV + H was significantly lower compared with CON. LC3B-II a marker of lysosomal autophagy was increased in both MV and MV + H. Incubation of MV + H diaphragm muscle fibers with the antioxidant dithiothreitol restored force generation of diaphragm fibers. Conclusions Hypercapnia partly protects the diaphragm against adverse effects of mechanical ventilation.