1. Low birthweight is now recognized as an important risk factor for early postnatal respiratory illness and it is becoming evident that low birthweight can increase the risk for airway dysfunction in children and adults. Our studies have been aimed at determining how low birthweight, resulting from intra-uterine growth restriction (IUGR), affects the control of breathing and the structural and functional development of the lung. 2. We have measured ventilatory responsiveness to progressive hypoxia and progressive hypercapnia during the first weeks after birth in postnatal lambs in which IUGR was induced by chronic placental insufficiency. It was found that the postnatal increase in ventilatory sensitivity to hypoxia observed in control lambs was diminished in low birthweight lambs; in contrast, the sensitivity to hypercapnia was not affected. In other studies, we found that IUGR caused by maternal anaemia led to elevated CO2 levels during sleep and wakefulness. 3. Our findings suggest that the prenatal development of the brain-stem or respiratory chemoreceptors may be affected by intra-uterine factors associated with IUGR, such as foetal hypoxaemia or hypoglycaemia. It is also possible that the structure of respiratory muscles and, hence, their ability to maintain a high level of ventilation may be affected by IUGR. 4. Recently, we studied the influence of IUGR on foetal lung development, in particular its effects on foetal lung liquid, a major determinant of lung growth, as well as alveolar structure and pulmonary surfactant. Lung liquid secretion and volume, in relation to bodyweight, were unaffected; however, there was evidence of structural and functional immaturity in the lungs. In foetuses exposed to IUGR, the air-blood barrier was thicker and, after birth, the diffusing capacity of the lungs for carbon monoxide was lower. In contrast, surfactant protein gene expression was enhanced, particularly in foetuses with high levels of circulating cortisol. 5. Further studies are needed to characterize the effects of specific types of prenatal compromise on postnatal control of ventilation and lung function, to determine mechanisms underlying these effects and to determine the capacity for postnatal recovery.