Lung development is orchestrated by highly integrated morphogenic programs of interrelated patterns of gene and protein expression. Injury to the developing lung in the canalicular and saccular phases of lung development alters subsequent alveolar and vascular development resulting in simplified alveolar structures, dysmorphic capillary configuration, variable interstitial cellularity and fibroproliferation that are characteristic of the 'new' bronchopulmonary dysplasia (BPD). Fetal and neonatal infection, abnormal stretch of the developing airways and alveoli, altered expression of surfactant proteins (or genetically altered proteins), polymorphisms of genes encoding for vascular endothelial growth factors, and reactive oxygen species result in imparied gas exchange in the developing lung. However, the 'new' BPD represents only one form of neonatal chronic lung disease and the consistent use of both the physiologic definition and severity scale would provide greater accuracy in determining the impact of the disease currently defined by its treatment. Our present labelling of the clinical state of oxygen supplementation and/or ventilatory support at 36 weeks' postmenstrual age and the histopathologic severity of alveolar arrest and vascular 'simplification' may not always be predictive of the degree of altered lung development and thus longer-term pulmonary function evaluations are needed to determine the impact of this disorder in specific infants. The proposed role of novel molecular therapies, and the combined effects of currently established therapies, as well as exogenous surfactant and inhaled nitric oxide or repetitive surfactant dosing, on the severity and incidence of new BPD hold considerable promise for reducing the long-term pulmonary morbidity among infants delivered prematurely.