We compared the effects of dexamethasone given to rats from age 4 to 14 days, on alveolar development at age 99 days. Judged by similar nose-to-tail length and body weight, somatic growth was not altered by dexamethasone treatment. Lung volumes in both air- and saline-filled lungs and mean chord length (Lm) were increased, whereas alveolar surface area (Sa) and surface-to-volume ratio (S/V) were diminished in dexamethasone-treated adult rats. These changes were associated with a significant reduction in DNA content and concentration but larger protein/DNA and RNA/DNA ratios in the lungs of treated rats. We conclude that dexamethasone treatment during the critical period of septation in rats impairs alveolar formation, which persists until adulthood and leads to larger and less complex gas-exchange regions. Inhibition of DNA synthesis due to dexamethasone may be responsible for its effects on alveolar development. Larger lung volumes in treated rats are, most likely, related to larger air space dimensions.