The airway and alveolar epithelia contain pulmonary neuroendocrine cells whose structure indicates an endocrine function. They are also in contact with sensory nerve fibres. These cells often aggregate into distinct corpuscles-neuroepithelial bodies-and carry membrane receptors sensitive to a number of stimuli, including hypoxia and nicotine. They synthesise, store and release a number of bioactive substances such as serotonin, calcitonin gene-related peptide and the mitogen bombesin. When these are released they contribute to redistribution of pulmonary blood flow, regulation of bronchomotor tone, modulation of the immune response, stimulation of sensory nerve fibres and regulation of lung growth and development. Pulmonary neuroendocrine cells and neuroepithelial bodies seem to be most important in the fetal and neonatal lung as regulators of airway development and hypoxia-sensitive chemoreceptors. There is a link between these cells and specific types of lung cancer and their involvement in lung and paediatric pathology may be profound.