Aeration of the lung and the transition to air-breathing at birth is fundamental to mammalian life and initiates major changes in cardiopulmonary physiology. However, the dynamics of this process and the factors involved are largely unknown, because it has not been possible to observe or measure lung aeration on a breath-by-breath basis. We have used the high contrast and spatial resolution of phase contrast X-ray imaging to study lung aeration at birth in spontaneously breathing neonatal rabbits. As the liquid-filled fetal lungs provide little absorption or phase contrast, they are not visible and only become visible as they aerate, allowing a detailed examination of this process. Pups were imaged live from birth to determine the timing and spatial pattern of lung aeration, and relative levels of lung aeration were measured from the images using a power spectral analysis. We report the first detailed observations and measurements of lung aeration, demonstrating its dependence on inspiratory activity and body position; dependent regions aerated at much slower rates. The air/liquid interface moved toward the distal airways only during inspiration, with little proximal movement during expiration, indicating that trans-pulmonary pressures play an important role in airway liquid clearance at birth. Using these imaging techniques, the dynamics of lung aeration and the critical role it plays in regulating the physiological changes at birth can be fully explored.