Officials said he was extubated Friday morning and is breathing well on his own with minimal supplemental oxygen. He remains in the ICU at Houston Methodist Hospital.
Officials said the former president is comfortable and watching the presidential inauguration coverage on television with his wife, Barbara, and their son Neil and daughter-in-law Maria.
Bush will remain in the ICU for further observation.
Mrs. Bush continued to feel better and officials said she is focusing on spending time with her husband. She is expected to stay in the hospital over the weekend as a precaution.
Bush was admitted to intensive care at Houston Methodist Hospital to address "an acute respiratory problem stemming from pneumonia. Doctors performed a procedure to protect and clear his airway that required sedation," his spokesman, Jim McGrath, said in a statement.
Barbara Bush also was admitted to the hospital Wednesday morning as a precaution after "experiencing fatigue and coughing," McGrath said in the same statement.
PHOTOS: George H.W. Bush and Barbara Bush through the years
President Bush was first hospitalized over the weekend suffering from shortness of breath and a cough and was treated with IV antibiotics.
At first, McGrath reported that he was responding well to the drugs. But Wednesday, the 41st President's condition changed and he was admitted to the intensive care unit, sedated and intubated.
"It's definitely very concerning," said Dr. Sanjay Gupta, CNN's chief medical correspondent, who noted that it is the first time President Bush has been intubated to protect his airway. "Certainly when someone is sedated, they're having trouble breathing on their own."
Bush, who served a single term as President from 1989 to 1993, was already not expected to attend the inauguration of President-elect Donald Trump in Washington on Friday due to health concerns.
Bush sent a letter to the President-elect on January 10, apologizing for missing the ceremony and saying that he and Barbara "wish you the very best as you begin this incredible journey of leading our great country."
"My doctor says if I sit outside in January, it likely will put me six feet under. Same for Barbara," Bush wrote, in a letter first reported by ABC News. "So I guess we're stuck in Texas."
Several bouts with illness have kept President Bush out of the spotlight in recent years and he has rarely made public remarks.
President Barack Obama said at a White House news conference Wednesday his White House has been in touch with the Bush family.
"They have not only dedicated their lives to this country, they have been a constant source of friendship and support and good counsel" over the years, Obama said.
"They are as fine a couple as we know," he added, calling the Bushes "really good people."
Bush revealed several years ago that he suffered from a form of Parkinson's disease that left him unable to walk. He uses a wheelchair or a scooter to get around and had two other health scares in 2014 and 2015.
In December 2014, he was hospitalized after experiencing shortness of breath, and the following July fell at his home in Kennebunkport, Maine, breaking the C2 vertebrae in his neck.
The injury did not result in any neurological problems, his spokesman said at the time.
The CNN Media Wire contributed to this report