BACKGROUND: Antenatal pulmonary inflammation is associated with reduced risk for respiratory distress syndrome but with an increased risk for bronchopulmonary dysplasia (BPD) with impaired alveogenesis. OBJECTIVE: We hypothesized that fetal systemic inflammation induced by intravenous (IV) lipopolysaccharide (LPS) would affect lung development in utero. STUDY DESIGN: Twenty-one fetal sheep were instrumented (107 days gestational age). Control fetuses received saline (N = 12) and 9 in the study group received 100 ng of LPS IV 3 days after surgery. Animals were assessed for lung maturation and structure after 3 (N = 5) and 7 (N = 4) days. RESULTS: Interleukin-6 concentration increased in the bronchoalveolar lavage more than 40-fold 3 days after LPS IV. Processing of prosurfactant protein (SP)-B to mature SP-B and increased SP-B concentrations were shown 7 days after LPS IV. Deposition of elastin fibers at sites of septation was disturbed within 3 days after LPS IV. CONCLUSION: Lung maturation and disturbed lung structure occurred after short-term exposure to fetal inflammation and suggests new targeted therapies for BPD.