The incidence of bronchopulmonary dysplasia (BPD), defined as oxygen need at 36 weeks of postmenstrual age, is about 30% for infants with birth weights<1000 grams and is now infrequent in infants with >1200 grams birth weight and >30 weeks gestation. The pathogenesis of BPD is multifactorial, with cytokines appearing to play a key role in initiation, propagation and resolution of this process. The pathology of BPD seen in the pre-surfactant era was remarkable for the presence of airway injury, inflammation and parenchymal fibrosis; pathology of "new" BPD reveals more uniform inflation and less marked fibrosis with both small and large airways being free of epithelial metaplasia, smooth muscle hypertrophy and fibrosis. There is, however, an arrest in acinar development.Up to 50% of infants with BPD require readmission to the hospital for lower respiratory tract illness in the first year of life. There are significant effects on lung mechanics, gas exchange and pulmonary vasculature. Pulmonary outcome in BPD include normalization of pulmonary mechanics and lung volumes over time as somatic and lung growth occurs whereas abnormality of the small airway persists. Airway hyper-responsiveness has been reported in long-term survivors of BPD, with no decrease in exercise capacity. The majority of the radiological findings reveal persistence of mild to moderate abnormalities long term. BPD is a result of dynamic processes involving inflammation, injury, repair and maturation. Infants with BPD have significant pulmonary sequelae during childhood and adolescence; whether the pulmonary dysfunction in these patients will predispose them to obstructive lung disease as older adults, remains to be seen.