To characterize lung function in young children we measured lung compliance and pulmonary conductance in 40 normal infants and children ranging in age from the newborn period to 5 years. Inspiratory and expiratory flow was measured by a pneumotachograph, esophageal pressure through a water-filled feeding tube, and functional residual capacity (FRC) by a N2 washout technique. The esophageal pressure change per breath [(mean +/- SD) 7.3 +/- 1.4 cm H2O] and specific compliance (75 +/- 13 ml/cm H2O/L-FRC) did not change with growth. Specific conductance was high (0.60 L/s/cm H2O/L-FRC) in preterm infants, decreasing rapidly with initial growth but minimally beyond 10 kg of body weight, and stabilizing at 0.10 L/s/cm H2O/L-FRC. During the age period studied, compliance increased approximately x 25 whereas conductance only rose five-fold. The changes in compliance and conductance were well correlated to FRC, body weight, and length. These findings suggest that in the last trimester of pregnancy the airways are already well developed and postnatal lung growth occurs mainly by formation of new alveoli, leading to a proportional increase in FRC and lung compliance. Postnatally, conductance increases much more slowly than FRC, resulting in a rapid drop in specific conductance.