Pulmonary immaturity, including deficiency in the surfactant system, incomplete structural/functional development of lungs and high chest wall compliance contribute to the pathogenesis of respiratory distress syndrome (RDS). Pulmonary edema and overperfusion, resulting from a patent ductus arteriosus, may further worsen the respiratory failure, and aggravate the surfactant deficiency. Infants born prematurely present with respiratory distress within the first few minutes of life. This quickly becomes life-threatening, and may result in death from severe respiratory failure if appropriate respiratory and general supportive therapy are not immediately instituted. The oxygenation deficit in RDS is secondary to V/Q mismatch and right-left shunting of blood via pulmonary and extrapulmonary routes. Hypoxemia induced pulmonary vasoconstriction further contributes to V/Q mismatch and R-L shunting. Hypoventilation in RDS is due to decreased tidal volume, increased dead space ventilation, and finally, decreased minute ventilation. Characteristically, pulmonary compliance, both static and dynamic, are greatly reduced resulting in a high work of breathing, whereas airway resistance is normal or only slightly increased. This combination of abnormal pulmonary mechanics results in lower respiratory time constant in respiratory units, and helps in achieving ventilation and oxygenation by using low inspiratory time in the ventilator. Management of RDS starts with prenatal identification of the risk, prolongation of pregnancy by tocolysis and prenatal administration of pharmacological agents, like betamethasone. These agents increase the pulmonary gas exchange surface area and induce endogenous pulmonary surfactant in the fetus. Advances in ventilatory and general management techniques have strikingly improved the outcome and prognosis of children suffering from RDS since the 1960s. Recent advancements in the prevention and treatment of RDS, e.g., acceleration of lung development by prenatal pharmacological manipulations and postnatal provision of exogenous surfactant, have significantly contributed to the decrease in mortality from RDS. Pharmacological induction of lung maturation by drugs in combination, and improved technology in lung ventilation are expected to further improve the course and outcome of the disease in future.