BACKGROUND Inhaled nitric oxide (iNO) can reverse neonatal pulmonary hypertension and bronchoconstriction and reduce proliferation of cultured arterial and airway smooth muscle cells. OBJECTIVE To see if continuous iNO from birth might reduce pulmonary vascular and respiratory tract resistance (PVR, RE) and attenuate growth of arterial and airway smooth muscle in preterm lambs with chronic lung disease. METHODS Eight premature lambs received mechanical ventilation for 3 weeks, four with and four without iNO (5-15 ppm). Four term lambs, mechanically ventilated without iNO for 3 weeks, served as additional control animals. METHODS PVR and RE were measured weekly. After 3 weeks, lung tissue was processed for quantitative image analysis of smooth muscle abundance around small arteries (SMart) and terminal bronchioles (SMtb). Radial alveolar counts were done to assess alveolar number. Endothelial NO synthase (eNOS) protein in arteries and airways was measured by immunoblot analysis. RESULTS At study's end, PVR was similar in iNO-treated and untreated preterm lambs; PVR was less in iNO-treated preterm lambs compared with term control animals. RE in iNO-treated lambs was less than 40% of RE measured in preterm control animals. SMart was similar in iNO-treated and both groups of control lambs; SMtb in lambs given iNO was significantly less (approximately 50%) than in preterm control animals. Radial alveolar counts of iNO-treated lambs were more than twice that of preterm control animals. eNOS was similar in arteries and airways of iNO-treated preterm lambs compared with control term lambs. CONCLUSIONS iNO preserves structure and function of airway smooth muscle and enhances alveolar development in preterm lambs with chronic lung disease.