Chronic lung disease is common in extremely preterm infants born in Australasia. In 2002, 53% of surviving infants born before 28 weeks' gestation remained either oxygen-dependent or on other respiratory support at 36 weeks' postmenstrual age. In the first weeks of life oxygenation should be kept generally "lower", although what is the most appropriate level remains uncertain. During the mid-phase of the neonatal course, functional oxygen saturation levels around 90-95% probably confer the best benefit/risk balance. The most appropriate target saturation range for infants on home oxygen also remains uncertain. Definitive data to guide clinical practice is lacking regarding the use of postnatal corticosteroids, bronchodilators, and diuretics for either the treatment or prevention of chronic lung disease. Home oxygen programmes are effective in avoiding prolonged hospitalisation for infants with chronic lung disease, but require the coordination of a large, multidisciplinary team.