School-age children who survive bronchopulmonary dysplasia (BPD) may have a permanent reduction in alveolar surface area that could limit gas transfer both at rest and during exercise. To test this hypothesis, 10 survivors of BPD, 10 children born prematurely without BPD, and 10 healthy children born at term, 6 to 9 yr of age, underwent treadmill exercise studies. During a three-phase protocol we measured intrabreath acetylene (C2H2) and carbon monoxide (CO) transfer, pulmonary function, and SaO2. Both at rest and during exercise, C2H2 transfer corrected for body surface area was lower in survivors of BPD than it was in children born prematurely without BPD or children born at term. With exercise the transfer of both gases increased sharply over resting values in children born prematurely and at term. In survivors of BPD C2H2 transfer with exercise did increase, but not as much as it did in control subjects, and corrected CO transfer did not change at all. In survivors of BPD and children born prematurely, FEV1 fell during recovery from exercise, but this did not correlate with C2H2 transfer or DL(CO)/VA. Thus, soluble gas transfer at rest and during acute exercise is reduced in children who survive BPD. This is likely explained either by long-term derangements in lung structure or residual right ventricular dysfunction affecting cardiac output.