Bronchopulmonary dysplasia (BPD) involves a chronic inflammation of the airway with arrest of lung development and is triggered by exposure of the immature lung to such noxious stimuli as barotrauma and hyperoxia. Thus, primary prevention should take the form of avoidance of these noxious stimuli, which means minimizing mechanical ventilation and keeping oxygen levels low. Pharmacologically, vitamin A supplements are the only agents shown to be both effective and safe. New approaches such as caffeine or NO administration deserve further study. Systemic steroids given in the 2nd week of life are highly effective, but must be restricted to extreme cases because of their severe side effects. The main elements in the reatment of established BPD are additional inspired oxygen (though the optimum target range for arterial oxygen saturation is not known) and prevention of viral infections. Prevention of respiratory syncytial virus infections via monoclonal antibodies such as palivizumab is expensive, however, and has not yet been shown to influence clinically relevant outcome parameters, such as re-intubation or mortality. Given these limited treatment options, BPD prevention remains of paramount importance.