Neonatal chronic lung disease (CLD) is the major long-term pulmonary complication of preterm birth affecting about 20% of infants who need mechanical ventilation. CLD is the result of abnormal repair processes following inflammatory lung injury that lead to remodeling of the lung. Inflammation may be initiated by a variety of stimuli including mechanical ventilation, oxygen toxicity and infection. The resultant neutrophil chemotaxis and degranulation leads to the release of enzymes such as matrix metalloproteinases that can cause proteolysis of the lung extracellular matrix. Abnormal healing with remodeling leads to poorly compliant lungs with reduced capacity for gas exchange. Drugs can influence the normal process of lung modeling or remodeling. Fetal lung development can be influenced by glucocorticosteroids and inflammation. Both can cause abnormal lung modeling with fewer, larger alveoli and accelerated lung maturation, which confers benefits in terms of reduced morbidity and mortality from respiratory distress syndrome but potentially increases the risk of subsequent lung injury. Antioxidants, such as retinol (vitamin A), administered post-natally may reduce the effects of oxidative stress leading to a modest reduction in CLD but they require repeated intramuscular injections. Postnatal glucocorticosteroid therapy can modify the lung inflammatory response and reduce CLD but it can also have detrimental effects on the developing brain and lung, thereby creating a clinical dilemma for neonatologists. Proteinase inhibitors may be a rational therapy but more research is needed before they can be accepted as a treatment for preterm neonates.'Modeling' is defined as planning or forming that follows a set pattern. The term is used to describe the normal process of lung growth and development that culminates in mature branching alveolar air spaces surrounded by a network of capillaries. Normal lung modeling occurs under a variety of genetic and hormonal influences that can be altered, leading to abnormal patterns of growth. 'Remodeling' is defined as altering the structure of or re-making and, in the case of the lung, is used to describe the abnormal patterns of lung growth that occur after lung injury. Modeling and remodeling of the lungs occur to an extent throughout life but never more rapidly than during the fetal and early neonatal periods, and factors that influence this process may lead to development of neonatal CLD. Some of the factors involved in normal and abnormal lung modeling and inflammation and glucocorticosteroid-induced remodeling in the perinatal period, in the context of neonatal CLD, are reviewed with considerations of how various drugs may influence these processes.