Little is known about lung function during early stages of postnatal maturation, although the complex structural changes associated with developing rat lung are well studied. We therefore analyzed corresponding functional (lung volume, respiratory mechanics, intrapulmonary gas mixing, and gas exchange) and structural (alveolar surface area, mean linear intercept length, and alveolar septal thickness) changes of the developing rat lung at 7-90 days. Total lung capacity (TLC) increased from 1.54 +/- 0.07 to 16.7 +/- 2.46 (SD) ml in proportion to body weight, but an increase in body weight exceeded an increase in lung volume by almost twofold. Series dead space volume increased from 0.21 +/- 0.03 to 1.38 +/- 0.08 ml but decreased relative to TLC from 14% to 8%, indicating that parenchymal growth exceeded growth of conducting airways. Diffusing capacity of CO (D(CO)) increased from 8.1 +/- 0.8 to 214.1 +/- 23.5 micromol min(-1) hPa(-1), corresponding to a substantial increase in surface area from 744 +/- 20 to 6,536 +/- 488 cm(2). D(CO) per unit of lung volume is considerably lower in the immature lung, inasmuch as D(CO)/TLC in 7-day-old rats was only 42% of that in adult (90 day-old) rats. In humans, however, infants and adults show comparable specific D(CO). Our functional and structural analysis shows that gas exchange is limited in the immature rat lung. The pivotal step for improvement of gas exchange occurs with the transition from bulk alveolarization to the phase of expansion of air spaces with septal reconstruction and microvascular maturation.