Supportive care with mechanical ventilation continues to be an essential strategy for managing severe neonatal respiratory failure; however, it is well known to cause and accentuate neonatal lung injury. The pathogenesis of ventilator-induced lung injury (VILI) is multifactorial and complex, resulting predominantly from interactions between ventilator-related factors and patient-related factors. Importantly, VILI is a significant risk factor for developing bronchopulmonary dysplasia (BPD), the most common chronic respiratory morbidity of preterm infants that lacks specific therapies, causes life-long morbidities, and imposes psychosocial and economic burdens. Studies of older children and adults suggest that understanding how and why VILI occurs is essential to developing strategies for mitigating VILI and its consequences. This article reviews the preclinical and clinical evidence on the pathogenesis and pathophysiology of VILI in neonates. We also highlight the evidence behind various lung-protective strategies to guide clinicians in preventing and attenuating VILI and, by extension, BPD in neonates. Further, we provide a snapshot of future directions that may help minimize neonatal VILI.