Fetal lung growth depends on the degree to which lungs are distended with luminal liquid. Fetal lungs are highly distended such that mean luminal volume exceeds the static relaxation volume. This high level of expansion is maintained by fetal breathing movements and by resistive effects of the upper airway during apnea; both factors oppose lung recoil. Mechanical stress in lung and other tissues stimulates cell division and tissue remodeling. Potential transduction mechanisms involve direct effects of cellular tension and mediation of locally released mitogenic factors. Further studies are required to further define links between lung tissue stress, increased growth, structural remodeling, and the endocrine environment. A common cause of fetal lung hypoplasia is a sustained reduction in mean lung expansion. Studies of mechanisms controlling fetal lung expansion have led to insights into the etiology of fetal lung hypoplasia and how it may be remedied in utero. Fetal lung hypoplasia can have long-lasting effects on postnatal lung function, as airway and alveolar formation may be compromised. Preterm birth may also result in incomplete structural development of the lungs as it shortens the period of increased intrauterine lung expansion.