Abstract: A compensator valve for use with a respirator/ventilator system having means for permitting patient assisted breathing and also permitting selection of a positive and expiratory pressure (PEEP). The system incorporating the advantages of the present invention generally incorporates an inhalation phase and an exhalation phase in its operative cycle. An exhalation valve assembly coupled into the system is operable between open and closed positions. This exhalation valve is maintained in a closed position during the time that breathing gas is being supplied to a patient. Operation of the compensator valve of the invention limits the exhalation/exhaustory pressure to a reference positive and expiratory pressure, thus affecting the patient's breathing effort. In practice, the difference between a reference positive and expiratory pressure and patient instantaneous exhaustory pressure causes the operation of the compensator valve of the invention so as to regulate the pressure applied to the exhaustion valve.