To determine the effect of analgesia and paralysis on lung volume and oxygenation in premature infants supported by mechanical ventilation because of hyaline membrane disease, functional residual capacity (FRC), and arterial/alveolar oxygen tension ratio were measured in nine premature infants with hyaline membrane disease before and after the administration of morphine sulfate and pancuronium bromide. Without a change of positive end-expiratory pressure, ventilator rate and peak inspiratory pressure were increased before the first set of measurements to minimize the contribution of the infants' own respiratory effort to total ventilation. These ventilator settings were then held constant (except fraction of inspired oxygen) before and after the administration of the drugs. The FRC was measured with a multiple-breath N2 washout technique by means of whole-body plethysmography to measure airway flow. The FRC and the ratio of arterial to alveolar oxygen tension decreased in seven of nine patients after treatment with morphine and pancuronium. The decrease in FRC for all patients was significant (2.4 +/- 2.9 ml/kg; p < 0.05), and a significant correlation was demonstrated between the change in the arterial/alveolar oxygen tension ratio and the change in FRC (r = 0.82; p < 0.01). Gestational age, birth weight, postnatal age, severity of lung disease, and time after the administration of morphine and pancuronium were not significantly correlated with the change in FRC. We believe that a decrease in oxygenation caused by alveolar derecruitment occurred even though the ventilator settings had been increased before the first set of measurements. The decrease in FRC in these infants, who are thought to have alveolar instability because of surfactant deficiency, may have resulted from the loss of expiratory braking mechanisms. We conclude that analgesia and paralysis should be used with caution under these circumstances.