A newborn infant with a massive left to right shunt secondary to a cerebral arteriovenous malformation required continuous oxygen therapy in high concentrations. Despite high PO2, the infant maintained low to normal PaO2 concentrations. Light and ultrastructural studies of the lungs demonstrated typical changes of acute pulmonary oxygen toxicity, including degeneration of capillary endothelium and type I pneumonocytes, interstitial edema, and alveolar exudation. These observations confirm earlier experimental animal studies that demonstrated that the alveolar Po2 concentration and not the Pao2 is the major factor contributing to pulmonary oxygen toxic effect.