Exogenous surfactant therapy has been part of the routine care of preterm neonates with respiratory distress syndrome (RDS) since the beginning of the 1990s. Discoveries that led to its development as a therapeutic agent span the whole of the 20th century but it was not until 1980 that the first successful use of exogenous surfactant therapy in a human population was reported. Since then, randomized controlled studies demonstrated that surfactant therapy was not only well tolerated but that it significantly reduced both neonatal mortality and pulmonary air leaks; importantly, those surviving neonates were not at greater risk of subsequent neurological impairment. Surfactants may be of animal or synthetic origin. Both types of surfactants have been extensively studied in animal models and in clinical trials to determine the optimum timing, dose size and frequency, route and method of administration. The advantages of one type of surfactant over another are discussed in relation to biophysical properties, animal studies and results of randomized trials in neonatal populations. Animal-derived exogenous surfactants are the treatment of choice at the present time with relatively few adverse effects related largely to changes in oxygenation and heart rate during surfactant administration. The optimum dose of surfactant is usually 100 mg/kg. The use of surfactant with high frequency oscillation and continuous positive pressure modes of respiratory support presents different problems compared with its use with conventional ventilation. The different components of surfactant have important functions that influence its effectiveness both in the primary function of the reduction of surface tension and also in secondary, but nonetheless just as important, role of lung defense. With greater understanding of the individual surfactant components, particularly the surfactant-associated proteins, development of newer synthetic surfactants has been made possible. Despite being an effective therapy for RDS, surfactant has failed to have a significant impact on the incidence of chronic lung disease in survivors. Paradoxically the cost of care has increased as surviving neonates are more immature and consume a greater proportion of neonatal intensive care resources. Despite this, surfactant is considered a cost-effective therapy for RDS compared with other therapeutic interventions in premature infants.