The venous admixture component of the total alveolar-arterial gradient for oxygen (AaD-O2) has been measured in 26 normal infants less than 4 days of age and in 12 others with the respiratory distress syndrome (hyaline membrane disease). The AaD-O2 in normal air-breathing infants (average 28 mm Hg) is nearly three times that seen in adults. Analysis of mixing data from N2-washout curves in these infants suggests such excellent distribution of ventilation that the distribution component of the AaD-O2 must be quite small. By contrast, estimates of the shunt component during oxygen breathing reveal a shunt flow in normal infants of nearly one-fourth cardiac output (AaD-O2 = 311) which is further increased in distressed babies (up to two-thirds cardiac output) and which can completely account for the large AaD-O2's found in both groups of infants.