Lung conditions are treated by implanting a flow restrictor in a passageway upstream from a diseased lung segment. The restrictor will create an orifice at the implantation site which inhibits air exchange with the segment to induce controlled atelectasis and/or hypoxia. Controlled atelectasis can induce collapse of the diseased segment with a reduced risk of pneumothorax. Hypoxia can promote gas exchange with non-isolated, healthy regions of the lung even in the absence of lung collapse.