A piston ventilator is provided which advantageously monitors the positive end expiratory pressure (PEEP) in a patient circuit for supplying breathable gas to a patient, and controls a shiftable valve element in an exhalation valve to regulate the amount of resistance during the exhalation portion of the patient's breath. The shiftable element is preferably an inflatable diaphragm which receives a pneumatic signal through a signal conduit. The pressure provided by the signal conduit is controlled by the amount of gas vented by a PEEP valve, wherein the greater the opening of the PEEP valve, the greater the amount of gas from the patient circuit is vented therethrough and consequently the less the restriction is provided in the exhalation valve. The primary source of pressure for the breathable gas is provided by a piston ventilator, with make-up pressurization in the patient circuit provided by a secondary source such as a blower to compensate for leakage and to provide pressurization for the signal conduit during the retraction of the piston within the cylinder and consequent exhalation portion of the patient's breath. Supplemental oxygen is provided to the patient circuit during retraction of the piston to ensure adequate oxygen enrichment at the incipient portion of the inhalation portion of the patient's breath.