To compare the effect of local anesthesia and general anesthesia on prognosis of decompression for thoracic spinal stenosis. From June 2005 to March 2011, 100 patients with thoracic spinal stenosis receiving decompression at our hospital were analyzed retrospectively. The technique used was the removal of posterior wall of the spinal canal via cap uncovering. The anesthesiologist divided the patients equally into observation group (local anesthesia) and control group (general anesthesia) based on the patients' serial number. The parameters measured were operation time, intraoperative bleeding, time of hospital stay, operation cost, postoperative Frankel grade recovery and postoperative JOA scores. All patients were followed up for 12-48 months either in outpatient clinic or at home. The operation time, intraoperative bleeding and time of hospital stay were obviously reduced in the observation group than in the control group; the hospitalization cost of the former was also lower (P < 0.05). Before surgery, the observation group had 11 patients of Frankel grade B, 18 patients of Frankel grade C and 21 patients of Frankel grade D. During the last follow-up, there were 8 patients of Frankel grade C, 11 patients of Frankel grade D and 31 patients of Frankel grade D. In the control group before surgery, there were 13 patients of Frankel grade B, 17 patients of Frankel grade C and 20 patients of Frankel grade D. For the last follow-up, there were 1 patient of Frankel grade B, 11 patients of Frankel grade C, 14 patients of Frankel grade D and 24 patients of Frankel grade E. JOA scores and response rate of the observation group were significantly higher than those of the control group 6 months after surgery and in the last follow-up (P < 0.05). Local anesthesia allows for intraoperative observation of neurological functions for decompression of thoracic spinal stenosis, thereby reducing the risks of spinal cord damage and other complications. This is particularly suitable for elderly patients who cannot tolerate general anesthesia. Moreover, local anesthesia has lower cost and causes less economic burden to the patients.