Technological advances, improved ventilatory strategies and better nursing techniques, coupled with the use of prenatal steroids and postnatal surfactant, have resulted in the survival of smaller and more immature infants. Preterm infants likely to develop bronchopulmonary dysplasia (BPD) are born during the canalicular phase of lung development at 24-26 weeks, a time when alveolar and distal vascular development commences. The histopathologic lesions of severe airway injury and alternating sites of overinflation and fibrosis in 'old' BPD have been replaced in 'new' BPD with the pathologic changes of large, simplified alveolar structures, a dysmorphic capillary configuration and variable interstitial cellularity and/or fibroproliferation. Airway and vascular lesions, when present, tend to occur in infants who over time develop more severe disease. The alveolar and capillary hypoplasia of new BPD will require the development of specific therapies, but avoiding volutrauma, oxidant injury and inflammation/infection will improve lung morphology.