The evidence for the benefits of inhaled nitric oxide (iNO) on gas exchange, cytokine-induced lung inflammation, and vascular dysfunction has been demonstrated by several animal and human studies. The use of iNO in extremely low birth weight neonates for the prevention of adverse outcomes like chronic lung disease and neurologic injury has been investigated, but the findings remain inconclusive. This review briefly outlines the biologic rationale for the use of iNO in preterm neonates and the results on the outcome measures of bronchopulmonary dysplasia and brain injury from the recent clinical trials. This article focuses on the potential toxicities, persistent controversies, and unanswered questions regarding the use of this treatment modality in this patient population at high risk for adverse outcomes.