Prenatal exposure of very low birth weight infants to chronic indolent chorioamnionitis with organisms such as mycoplasma and ureaplasma is frequent. Chorioamnionitis is inconsistently associated with changed risks of respiratory distress syndrome (RDS) or bronchopulmonary dysplasia (BPD), probably because the diagnosis of chorioamnionitis does not quantify the extent or duration of the fetal exposures to infection and inflammation. The correlations between prenatal exposures and postnatal lung disease also are confounded by the imprecision of the diagnoses of RDS and BPD. In animal models, chorioamnionitis caused by pro-inflammatory mediators or live ureaplasma induces lung maturation, but also causes alveolar simplification and vascular injury. Intra-amniotic endotoxin administration also modulates the fetal innate immune system, resulting in maturation of monocytes to alveolar macrophages and the induction or paralysis of inflammatory responses depending on exposure history. Prenatal inflammation can have profound effects on the fetal lung and subsequent immune responses.