Mechanical ventilation in premature infants may injure the lungs or exacerbate the pre-existing condition that led to the need for mechanical ventilation. Ventilator-induced lung injury (VILI) may be associated with alveolar structural damage, pulmonary oedema, inflammation, and fibrosis. This injury is not uniform and is associated with surfactant dysfunction. Recovery from VILI includes clearance of pulmonary oedema and alveolar structural repair. Mechanisms of VILI include high airway pressure (barotrauma), large gas volumes (volutrauma), alveolar collapse and re-expansion (atelectotrauma), and increased inflammation (biotrauma). Injury to the lung may lead to other organ dysfunction. The premature lung is more susceptible to VILI, and lung injury may exacerbate the disturbance of lung development that occurs after birth. Therapies targeting specific processes in lung injury, and which complement the protective ventilator management strategies to avoid atelectotrauma and lung overdistension are an area of active research.