Currently, virtually all cases of bronchopulmonary dysplasia (BPD) occur in infants with birth weights <1250 g. A minority of these infants will develop a severe form of BPD, which evolves into a long-term failure of alveologenesis and vasculogenesis or, in some, a progressive pulmonary hypertension leading to an early death. Effective interventions, based on the mechanisms underlying the lung injury, most need to be developed for this group. We review putative mechanisms of lung and vascular injury, drawn on data from both clinical studies and animal models, then review currently used and potentially promising interventions. Despite numerous initiatives in clinical management, the overall incidence of BPD remains unchanged. Downward or upward manipulation of oxygen saturations is limited by increased risks of neurological impairment or retinopathy. Attempts to minimize ventilator-induced volutrauma have generally been disappointing, though avoidance of early intubation may be beneficial, and a volume-targeted approach to ventilation appears promising. Uncertainties exist about dosing, safety, and efficacy of such therapeutic interventions as high-dose vitamin A and caffeine in the currently most susceptible infant population. Promising approaches based on animal studies, but not yet adequately assessed in human infants, include the use of nonsteroidal antiinflammatory agents, antiprotease therapy and targeting bombesin-like peptides.