Advances in neonatology have led to increased survival at younger gestational ages. These advances have included the ability to provide and titrate oxygen, improved modalities of assisted ventilation, improved nutritional and environmental support, and surfactant therapy. As a result of increasing survival of these immature infants, bronchopulmonary dysplasia (BPD) has become a consistent outcome despite improvements in technology. Varying definitions of BPD have emerged in an effort to best identify infants at risk for long-term adverse outcome and those who might benefit most from preventive therapies. Underlying abnormal pulmonary development of extremely preterm infants in the face of exposure to oxygen, assisted ventilation and inflammation make this a complex, multifactorial disease. Recent focus has been directed at preventing and treating inflammation. Efforts to minimize the inflammatory process include avoiding hyperoxia, minimizing injury from assisted ventilation, and preventing and treating postnatal infections. Additional therapies to modulate inflammation, such as steroid therapy or inhaled nitric oxide, need further investigation of both short- and long-term outcomes before routine use can be recommended.