Respiratory motion in PET and PET/CT blurs the images and can cause attenuation-related errors in quantitative parameters such as standard uptake values. In rare instances, this problem even causes localization errors and the disappearance of tumors that should be detectable. Attenuation errors are severe near the diaphragm and can be enhanced when the attenuation correction is based on a CT series acquired during a breath-hold. To quantify the errors and identify the parameters associated with them, the authors performed a simulated PET scan based on respiratory-gated CT studies of five lung cancer patients. Diaphragmatic motion ranged from 8 to 25 mm in the five patients. The CT series were converted to 511-keV attenuation maps which were forward-projected and exponentiated to form sinograms of PET attenuation factors at each phase of respiration. The CT images were also segmented to form a PET object, moving with the same motion as the CT series. In the moving PET object, spherical 20 mm mobile tumors were created in the vicinity of the dome of the liver and immobile 20 mm tumors in the midchest region. The moving PET objects were forward-projected and attenuated, then reconstructed in several ways: phase-matched PET and CT, gated PET with ungated CT, ungated PET with gated CT, and conventional PET. Spatial resolution and statistical noise were not modeled. In each case, tumor uptake recovery factor was defined by comparing the maximum reconstructed pixel value with the known correct value. Mobile 10 and 30 mm tumors were also simulated in the case of a patient with 11 mm of breathing motion. Phase-matched gated PET and CT gave essentially perfect PET reconstructions in the simulation. Gated PET with ungated CT gave tumors of the correct shape, but recovery was too large by an amount that depended on the extent of the motion, as much as 90% for mobile tumors and 60% for immobile tumors. Gated CT with ungated PET resulted in blurred tumors and caused recovery errors between -50% and +75%. Recovery in clinical scans would be 0%-20% lower than stated because spatial resolution was not included in the simulation. Mobile tumors near the dome of the liver were subject to the largest errors in either case. Conventional PET for 20 mm tumors was quantitative in cases of motion less than 15 mm because of canceling errors in blurring and attenuation, but the recovery factors were too low by as much as 30% in cases of motion greater than 15 mm. The 10 mm tumors were blurred by motion to a greater extent, causing a greater SUV underestimation than in the case of 20 mm tumors, and the 30 mm tumors were blurred less. Quantitative PET imaging near the diaphragm requires proper matching of attenuation information to the emission information. The problem of missed tumors near the diaphragm can be reduced by acquiring attenuation-correction information near end expiration. A simple PET/CT protocol requiring no gating equipment also addresses this problem.