In patients with pulmonary emphysema and mild to moderate airflow limitation, one does not expect the features marked exertional dyspnea and hypoxemia as well as a profound decrease in diffusing capacity of the lung for carbon monoxide (DLCO). Here we describe this phenotype and its prognosis. From our database, we retrospectively selected cases associating emphysema, exertional breathlessness, O₂ requirement at least upon exercise, forced expiratory volume in 1 sec (FEV₁) ≥ 50% predicted, and DLCO ≤ 50% predicted, without associated combined pulmonary fibrosis and emphysema, right-to-left shunt, or severe pulmonary hypertension. Over a 12-year period, we identified 16 patients with emphysema and the above presentation. At the initial evaluation, the median age was 62 years (interquartile range 53.8–68.9). The median FEV₁ and DLCO% predicted and mean pulmonary artery pressure were 86 (65–95)%, 38 (31–41)%, and 20 (17–25) mm Hg, respectively. On room air, the median arterial partial pressure of oxygen and partial pressure of carbon dioxide in arterial blood were 63.5 (55.8–69) mm Hg and 34.5 (31–36) mm Hg with increased median alveolar-arterial oxygen difference (46 [39–51] mm Hg). After the initial evaluation, the respiratory condition worsened in 13 of 14 (92.8%) patients with one or more re-evaluations (median follow-up 2.6 [0.9–5.8] years). In 12, lung transplantation was considered. Four patients died after 5.8, 5.7, 7.1, and 0.8 years of follow-up, respectively. We describe an underrecognized phenotype of pulmonary emphysema featuring a particular profile characterized by marked exertional dyspnea, impaired pulmonary gas exchange with low DLCO and marked oxygen desaturation at least on exercise but with mild or moderate airway obstruction.