Pulmonary function was measured in 39 infants with chronic lung disease who had required mechanical ventilation starting during the first week of life for a median of 9 days (range 1 to 46 days) and supplemental oxygen for a median of 48 days (range 28-162 days). Their mean birth weight was 1140 g (range 550 to 2325 g), and mean gestational age 29.8 weeks (range 26 to 37 weeks). Ventilation was measured by pneumotachography, esophageal pressure through a water-filled feeding tube, and functional residual capacity (FRC) by a modified nitrogen washout technique. Lung compliance, pulmonary conductance, and FRC were determined at 1, 3, 6, 12, 18, 24, and 36 months after birth. Pulmonary function was also determined in 40 normal children, ranging in age from neonates to 5 years, who served as controls. In infants with chronic lung disease, growth in weight and length followed the 10th to 25th percentiles of the normal curve. Minute ventilation and respiratory effort remained elevated throughout the follow-up. FRC per kilogram of body weight was decreased at 1, 3, and 6 months after birth, but thereafter was in the normal range. FRC increased in proportion to weight at the same rate as in the controls. Lung compliance was only half of normal at 1 month, increased with growth in close correlation with weight, and was approximately 80% of normal at the end of follow-up. Pulmonary conductance was 50% of normal at 1 month, increased little during the first 6 months, but reached 85% of normal at 3 years of age. There was no evidence of gas trapping. These results indicate that in infants with chronic lung disease after mechanical ventilation, lung volume increases normally, probably by formation of new alveoli, which also leads to improvement in lung compliance. Airway growth is slow during the first 6 months after birth, but the subsequent faster growth leads to conductance values close to normal at 3 years of age.