Mature rabbit fetuses produce intrapulmonary foam at the onset of breathing at birth. Bubbles establish a minimal volume immediately and require relatively little distending pressure for their formation. Stability of bubbles that are formed during both rapid spontaneous breathing in vivo and slow inflation-deflation of excised lungs is determined by the surfactant content of fetal pulmonary fluid (FPF). Mature bubbles can be delivered at atmospheric pressure from all aerated saccules by microdissection. When observed in air-equilibrated normal saline solution (NSS), their stability with time indicates that film surface tension (gamma) is very low, i.e., near-zero. When mature FPF is replaced with NSS, stable bubble production is absent. Conversely, supplementation of immature FPF with a surfactant dispersion prior to aeration induces bubbles that are as stable (near-zero gamma) as those from mature lungs. Proper mixing of the supplement, e.g., by repeated inflation-deflation, is required for proper distribution of foam in the immature fetal saccules. From these findings, it may be concluded that bubbles establish the condition for production of near-zero gamma in situ. The latter stabilizes the lung by sustaining normal liquid transfers (Pattle theory). In addition, bubble films promote mechanical stability by providing a saccular infrastructure that resists collapse and retards surface spreading.