Lipids are structural components of all tissues and are indispensable for cell membrane synthesis. The brain, retina, and other neural tissues are particularly rich in LCPUFAs, affecting neural structural development and function. LCPUFAs serve also as specific precursors for eicosanoid production (prostaglandins, prostacyclins, thromboxanes, and leukotrienes). These autocrine and paracrine mediators are powerful regulators of numerous cell and tissue functions (e.g., thrombocyte aggregation, inflammatory reactions, and leukocyte functions, vasoconstriction and vasodilatation, blood pressure, bronchial constriction, uterine contraction). Dietary lipid intake affects cholesterol metabolism at an early age and is associated with cardiovascular morbidity and mortality in later life. Over recent years, the role of fatty acids in modulating signal transduction and regulating gene expression have been described, emphasizing the complex of fatty acid effects. Dietary fatty acids, especially LCPUFA, can have significant effects in the modulation of developmental processes affecting the clinical outcomes of extremely premature infants.