Lung conditions are diagnosed and optionally treated using a functional assessment catheter or a functional lung assessment and treatment catheter. A flow restrictive component is initially placed in a bronchus or lung passageway upstream from a diseased lung region. The isolated lung region is then functionally assessed through the catheter, while the flow restrictive component remains in place. If the patient is a good candidate for treatment by occlusive or restrictive treatment techniques, the flow resistive component may be left in place. If the patient is not suitable for such treatment, the flow resistive component may be removed.