This paper presents recently published literature linking current understanding of neonatal respiratory physiology and pathophysiology to current therapy. Respiratory development is a continuum. The persistence of a fetal breathing pattern into the neonatal period may explain idiopathic neonatal apnea and the pattern of breathing seen with asphyxial apnea. Discussion with the obstetrician will focus more on prenatal diagnosis and on ensuring that prenatal corticosteroids are given. The advent of inhaled nitric oxide therapy for persistent pulmonary hypertension of the newborn offers a viable method of avoiding extracorporeal membrane oxygenation. New insights into the management of respiratory distress syndrome are derived from studies of how lung mechanics are altered by surfactant therapy. Lung injury due to capillary stress is highlighted as is attention to the way in which artificial ventilation is performed. Finally, the development of optimal guidelines for care in respiratory distress syndrome must involve consideration of multiple, interacting factors and their impact on associated conditions, especially periventricular hemorrhage.