Three-dimensional reconstructions from serial sections were used to examine postnatal lung development of rats reared in air (control) or oxygen. From birth to age 21 days, control lung volume increased ninefold, and the average volume of each ventilatory unit (all airspaces distal to a single respiratory bronchiole) increased seven times. There were approximately 5,000 ventilatory units at birth and on day 21, indicating that the lung grew by enlargement and subdivision of ventilatory units and not by their multiplication. Growth in hyperoxia (greater than 97%) for 7 days had no effect on the number of ventilatory units but, compared to controls, total lung volume and ventilatory unit volume were reduced 32% and 16%, respectively. At birth there were 0.6 x 10(6) alveoli, and at age 7 days in controls alveolar number increased 16-fold while the average volume of a single alveolus fell to one-sixth that at birth. Exposure to hyperoxia for 7 days stopped alveolarization; the surface area to volume ratio (Sa/V) of the ventilatory unit was lower, alveolar number was the same as at birth, and the alveoli present were large. At age 21 days, after 14 days of recovery in air, lung volume and ventilatory unit volume were greater than in controls but the Sa/V of the ventilatory unit was still depressed 20%. Alveoli from oxygen-exposed lungs were larger than in controls, and a greater size distribution coefficient showed them to be more variable. A shape coefficient for alveoli did not change as a function of the animal's age or oxygen treatment; it demonstrated proportional growth of alveolar height and diameter.