Bronchopulmonary dysplasia (BPD) is a chronic lung disease of primarily premature infants that results from an imbalance between lung injury and repair in the developing lung. BPD is the most common respiratory morbidity in preterm infants, which affects nearly 10, 000 neonates each year in the United States. Over the last two decades, the incidence of BPD has largely been unchanged; however, the pathophysiology has changed with the substantial improvement in the respiratory management of extremely low birth weight (ELBW) infants. Here we have attempted to comprehensively review and summarize the current literature on the pathogenesis and pathophysiology of BPD. Our goal is to provide insight to help further progress in preventing and managing severe BPD in the ELBW infants.