A surgical instrument for delivering energy to lung tissue, for example to cause lung volume reduction. In one embodiment, an elongated catheter has a handle portion that includes an interior chamber that is supplied with a biocompatible liquid media under pressure. An energy source delivers energy to the media to cause a liquid-to-vapor phase change within the interior chamber and ejects a flow of vapor media from the working end of the catheter. The delivery of energy and the flow of vapor are controlled by a computer controller to cause a selected pressure and selected volume of vapor to propagate to the extremities of the airways. Contemporaneously, the vapor undergoes a vapor-to-liquid phase transition which delivers large amount of energy to the airway tissue. The thermal energy delivered is equivalent to the heat of vaporization of the fluid media, which shrinks and collapses the treated airways. The treated tissue is the maintained in a collapsed state by means of aspiration for a short interval to enhance tissue remodeling. Thereafter, the patients wound healing response causes fibrosis and further remodeling to cause permanent lung volume reduction.