Preterm infants suffer from significant respiratory morbidity during the first years of life, but the underlying lung pathophysiology is not fully understood. This study aimed to comprehensively characterize the pulmonary functions of preterm infants using full infant pulmonary function testing (iPFT). Between 2008 and 2019, we recruited 150 infants (Mage 10.5 ± 6 months) of them 104 preterm infants (median gestational age [GA] = 34 weeks (28-36), n = 23 with bronchopulmonary disease [BPD]) and 46 controls born at term. We compared full iPFT parameters of preterm infants to a control group of term infants. Subanalysis included a comparison of preterm infants by BPD status and GA. Preterm infants had impaired flow parameters, reduced compliance, and air trapping, compared to term infants. Only 15% (n = 14) of the preterm group had normal iPFT, compared to 69% (n = 31) of the term group. The majority of the impaired iPFT in preterm infants were obstructive and 72% (n = 69) had no response to bronchodilators. Reduced maximal flow at the functional residual capacity point (V'maxFRC) was associated with low birth weight and GA. There were no major differences between preterm infants with or without BPD. Preterm infants in the first year of life, demonstrated a high prevalence of obstructive iPFT unresponsive to bronchodilators. BPD status did not add to the degree of pulmonary impairment. These data reveal an airway-predominant pathology of the modern-era prematurity-associated lung disease. Pulmonary function screening tests at an early age may be of value in determining the presence and severity of lung disease in the preterm population. V'maxFRC may provide a good assessment of pulmonary impairment in preterm infants.