It is well recognised that reducing positive end expiratory pressure (PEEP) leads to an increase in the tidal volume and minute volume in ventilated neonates. The magnitude of this effect is perhaps not commonly appreciated, however. Effectively, PEEP is four times as potent as peak inflation pressure (PIP) in bringing about changes in tidal volume. The influence of changes in PEEP and PIP on tidal volume and the relative magnitude of each are considered. Twenty one preterm infants were studied on 38 separate occasions. All were sedated, paralysed, and ventilated, 19 for hyaline membrane disease. A 1 cm H2O reduction in PEEP was twice as potent as a 2 cm H2O increase in PIP in achieving an increase in tidal volume (14 v 7%). Similarly, increasing PEEP by 1 cm H2O was twice as effective as a 2 cm H2O decrease in PIP in reducing tidal volume (13 v 6%). Small (0.5-1 cm H2O) changes in PEEP can often be used to improve ventilation and carbon dioxide elimination. Levels of PEEP of 4-5 cm H2O may, at times, impair gas exchange and contribute to overdistension.