Significant progress have been made in understanding the mechanisms of alveolar fluid clearance at the time of birth and the transition from placental oxygenation to air breathing. During fetal life, the mammalian lung is a fluid filled secretory organ that fills no respiratory function. Its potential air spaces are filled with fluid that is actively secreted in response to an osmotic force generated by Cl(-)-secretion and the fluid-filled lung is necessary for a proper development of the air-breathing lung. As term approaches, net Cl(-)-secretion decreases, which is accompanied by a decreased secretion rate of the fluid into the air spaces. Concomitantly with the decreased Cl(-)-secretion, the alveolar epithelium begins to absorb Na+ to prepare for fluid absorption and the air breathing life. The causes for the decreased Cl(-)-secretion and the beginning of the Na+ absorption are not clear. Alterations in the hormonal milieu of the lung as well as changes in plasma stress hormone levels have been suggested to play roles. The switch from a placental oxygenation to pulmonary oxygenation requires that the fluid in the air spaces be rapidly removed from the lung lumen. Recent studies have demonstrated that removal of the alveolar fluid at birth is regulated via endogenous plasma epinephrine in the newborn. Molecular, cellular, and whole animal in vivo studies have demonstrated that fluid absorption at birth is related to expression and function of the epithelial sodium channel (ENaC). Several different in vivo and in vitro preparations have been used to investigate the mechanisms of alveolar fluid transport, primarily in adult lungs and have demonstrated that alveolar fluid absorption is driven by active Na+ transport. Both catecholamine-dependent and -independent regulatory mechanisms have been identified, probably acting on ENaC and other apical sodium channels and/or the basolaterally located Na+, K(+)-ATPase. Future studies are needed to integrate new insights to the molecular mechanisms behind fluid clearance with their function in both normal and pathological lungs.