The identification of the biologic properties of nitric oxide (NO) is one of the key scientific discoveries of the century, but its potential for treating human disease is yet to be fully realized. NO has a basic role in regulating vascular tone of the pulmonary circulation, and recent animal models have suggested a more wide reaching influence on perinatal lung development. In animal models, NO has effects on lung growth, angiogenesis, airway smooth muscle proliferation, vascular remodeling, surfactant function, inflammation, and pulmonary mechanics. However, despite extensive basic science investigation and completion of several large clinical trials, the role of NO in the treatment of the premature infant with respiratory distress syndrome remains unclear. One must conclude that the interaction of lung immaturity, ventilator and oxygen-induced lung injury, and NO biology in the premature newborn is incompletely understood. Clinical trial results of inhaled NO therapy in the premature infant are accumulating, but the results do not suggest a clear-cut advantage for the population at greatest risk for death and disability. Whether trial design, dose, duration of therapy, or other factors are responsible has not been determined. Further research is needed to answer these questions and more clearly define the population of premature infants who may derive benefit from this new therapy.