Bronchopulmonary dysplasia (BPD) in infants with neonatal respiratory disease significantly increases the duration of hospitalization and cost of medical care. Early discharge on home oxygen therapy results in cost savings for third-party payers and the hospital, but adds financial and emotional burdens for the family. The median cost of initial hospitalization for 59 infants was $173,160 each. The median duration of home oxygen therapy was 92 days; the median cost was $5,195, compared with a projected cost of $46,920 for hospitalization for the same period. Two thirds of the 59 families experienced increased financial stress associated with marital status, reduced income, type of health insurance, and/or lack of respite or nursing help. Emotional stress was assessed in 26 (44%) of the families; one half coped well. Parents' perception of adequate insurance and stable income was significantly associated with positive coping. Providing home care for an infant with BPD on oxygen therapy is rewarding in many respects, but success requires appreciating its financial and emotional impact on families and providing them with social and financial support.