Lung growth occurs as a series of tightly regulated events commencing in the embryo and continuing post-natally. It depends on a number of factors, including developmental, genetic and environment ones. Abnormalities of any of these factors may have a profound influence on lung growth. The causes of developmental abnormalities of the lung such as lung cysts and congenital diaphragmatic hernia are poorly understood, but may result from a combination of genetic and environmental factors. Normal fetal breathing movements and an adequate balance between the production of fetal lung fluid and drainage of this fluid are both essential for normal fetal lung growth. It seems that fetal breathing movements are necessary to maintain sufficient pressure within the airways and perhaps to directly stimulate lung growth via induction of mitogenic activity. The volume of intra-pulmonary fluid is regulated by the resistance of the upper airway and by contractions of the diaphragm. Increased drainage of the amniotic fluid, another essential factor for normal lung growth and development, will result in marked pulmonary hypoplasia as may occur with pre-term rupture of the membranes and with fetal renal disease. Perhaps the most important factor for adverse lung growth is pre-term delivery of the infant from any cause including intra-uterine infection. Both ante- and post-natal factors, including mechanical ventilation and oxygen therapy, will affect normal alveolization. In this review, particular attention is paid to breathing movements and the balance between fluid production and drainage.