Serial bronchoalveolar lavage (BAL) was performed prospectively on 10 normal control subjects, 20 Respiratory Distress Syndrome (RDS), and 11 Bronchopulmonary Dysplasia (BPD) newborn infants to evaluate the role of pulmonary inflammation in neonatal lung disease. Minimal inflammation was found in BAL at less than 24 h of life in all groups, but significant pulmonary polymorphonuclear leukocyte (PMN) influxes were noted at 96 h in RDS and BPD compared with control subjects. By 1 wk of life, BAL PMN counts returned to normal in RDS, but counts remained significantly elevated through 5 wk in BPD. Alveolar macrophage (AM) counts were significantly elevated at 96 h in RDS (p less than 0.05), but were significantly depressed in BPD at 4 and 5 wk (p less than 0.05). The BAL elastase/alpha 1-proteinase inhibitor (alpha 1Pi) ratios in RDS did not differ from those of normal control subjects; however, these ratios were significantly elevated from 1 through 4 wk of life in BPD, placing these infants at risk for proteolytic lung damage. Lavage elastase levels were elevated in both RDS and BPD, associated with a parallel increase in BAL alpha 1Pi in RDS and depressed BAL alpha 1Pi in BPD. These findings suggest that pulmonary inflammation, associated with a prolonged PMN influx and an imbalance between elastase and alpha 1Pi, may contribute to the development of the neonatal chronic lung disease, BPD.