We studied lung development in children with or without bronchopulmonary dysplasia (BPD) using light microscopic morphometry and thick lung sections stained for elastic fibers. One lung was obtained at autopsy from each of eight patients with BPD (ages, 2 to 28 months) and six children (ages, 5 days to 51 months) who died without lung disease. Patients with BPD demonstrated severe somatic growth retardation and had reduced lung volumes with abnormal lobar volume proportions. In the central bronchi mean volume proportion of glands and smooth muscle was increased in BPD. Bronchiolar density was also increased, but it tended to normalize with advancing age. Mean bronchiolar diameter was slightly smaller in BPD, and bronchiolar smooth muscle hypertrophy was a constant histologic feature. The most striking change, however, was noted in alveolar structure and development. Total alveolar number was severely decreased in patients with BPD compared with that in control subjects, and there was little evidence of compensatory alveolar development with increasing age. Lung internal surface area was correspondingly reduced, and mean linear intercept was increased. Sections stained for elastic tissue demonstrated in the patients with BPD a simplified acinar structure with thickened, tortuous, and irregularly distributed alveolar elastic fibers. We conclude that in severe, fatal BPD there is marked impairment of lung development with alveolar hypoplasia and reduced internal surface area. In addition, bronchial and bronchiolar smooth muscle hypertrophy and bronchial gland hyperplasia may be important contributing factors to airflow limitation.