Automatic tube compensation (ATC) is a new option to compensate for the non-linearly flow-dependent pressure drop across an endotracheal or tracheostomy tube (ETT) during inspiration and expiration. ATC is based on a closed-loop working principle. ATC is not a true ventilatory mode but rather a new option which can be combined with all conventional ventilatory modes. ATC compensates for the tube-related additional work of breathing. As of yet, ATC has been associated with certain benefits for the tracheally intubated spontaneously breathing patient. Among these, reduced work of breathing, preservation of the natural "noisy" breathing pattern, enhanced synchronization between the patient and the ventilator, and improvement of respiratory comfort seem to be most important. Moreover, sufficient spontaneous breathing with ATC alone, i.e. without any additional ventilatory assist, might help to predict more accurately readiness for extubation in the last phase of weaning from mechanical ventilation. Furthermore, it has been shown in patients with acute lung injury that ATC unloaded the inspiratory muscles and increased alveolar ventilation without adversely affecting cardiorespiratory function. It is the purpose of this article to describe the working principle of ATC and to give a review of the actual scientific discussion concerning ATC.