Postoperative pulmonary edema is a well-known postoperative complication caused as a result of numerous etiological factors which can be easily detected by a careful surveillance during postoperative period. However, there are no preoperative and intraoperative criteria which can successfully establish the possibilities for development of postoperative pulmonary edema. The aims were to review the possible etiologic and diagnostic challenges in timely detection of postoperative pulmonary edema and to discuss the various management strategies for prevention of this postoperative complication so as to decrease morbidity and mortality. The various search engines for preparation of this manuscript were used which included Entrez (including Pubmed and Pubmed Central), NIH.gov, Medknow.com, Medscape.com, WebMD.com, Scopus, Science Direct, MedHelp.org, yahoo.com and google.com. Manual search was carried out and various text books and journals of anesthesia and critical care medicine were also searched. From the information gathered, it was observed that postoperative cardiogenic pulmonary edema in patients with serious cardiovascular diseases is most common followed by noncardiogenic pulmonary edema which can be due to fluid overload in the postoperative period or it can be negative pressure pulmonary edema (NPPE). NPPE is an important clinical entity in immediate post-extubation period and occurs due to acute upper airway obstruction and creation of acute negative intrathoracic pressure. NPPE carries a good prognosis if promptly diagnosed and appropriately treated with or without mechanical ventilation.