A simplified model of periodic breathing, proposed by Whiteley et al. (Math. Med. Biol. 20:205–224, 2003), describes a non-uniform breathing pattern for a lung with an inhomogeneous gas distribution, such as that observed in some subjects suffering from respiratory disease. This model assumes a constant alveolar volume, and predicts incidence of irregular breathing caused by small, poorly ventilated regions of the lung. Presented here is an extension to this work which, by allowing variable lung volume, facilitates the investigation of pulmonary collapse in poorly ventilated compartments. A weakness of the original model is that a very small alveolar volume is required for periodic breathing to occur. The model presented within, which removes the assumption of constant compartment volume and allows alveolar volume to vary with time, predicts periodic breathing at higher, more realistic alveolar volumes. Furthermore, the predicted oscillations in ventilation match experimental data more closely. Thus the model that allows for alveolar collapse has improved upon these earlier results, and establishes a theoretical link between periodic breathing and atelectasis.