Cystic diseases of the lung are a rare spectrum of anomalies, commonly diagnosed prenatally. We present a case of a newborn twin, born at 29 weeks gestational. The infant was diagnosed with respiratory distress syndrome shortly after birth, treated with surfactant by the INSURE method (intubation, surfactant administration, extubation) and required only short-term non-invasive ventilation. On the 40th day of life an extensive single lung cystic disease was identified after respiratory deterioration occurred. The diagnostic approach is presented. The differential diagnosis of neonatal cystic lung disease includes congenital and acquired diseases. The most common cystic lesions presenting in the neonatal period include congenital pulmonary airway malformation (CPAM), pulmonary sequestration, bronchogenic cysts, congenital lobar emphysema and acquired lung damage resulting in cyst formation including pulmonary interstitial emphysema, damage secondary to infection disease. Follow-up showed gradual resolution of the cystic disease, supporting an acquired lung disease. The cystic lung disease may be due to barotrauma from non-invasive ventilation, unequal surfactant distribution, genetic susceptibility to the relatively mild barotrauma associated with non-invasive ventilation or a combination of these factors. The case report demonstrates that procedures considered "safe" such as non-invasive ventilation and surfactant administration may result in extensive lung damage.