Human lung development is divided into five stages: embryonic, pseudoglandular, canalicular, saccular, and alveolar. The boundaries between these stages are not sharp; rather, overlap occurs between various gestational ages and individuals. The anatomic and morphological characteristics of each stage are described; general principles of lung development and cytodifferentiation of type I and type II pneumocytes are discussed. The complex phenomenon of lung development incorporates two processes--lung growth and lung maturation. Although these processes are developmentally related, they appear to be separately controlled. Lung growth seems to be influenced primarily by physical factors such as intrathoracic space, lung liquid volume and pressure, and amniotic fluid volume among others. Special attention is given to fetal lung liquid dynamics and the effects of its manipulation on lung growth, particularly by tracheal occlusion. Lung maturation has two components--structural and biochemical (ie, surfactant). Structural lung maturation appears to be regulated by physical factors. Physical factors that produce hypoplasia produce structurally immature lungs, whereas physical factors that produce hyperplasia produce structurally mature lungs. Biochemical maturation appears to be hormonally regulated by several endocrine organs (pituitary, adrenal, thyroid) and a host of endocrine factors including corticotropin, cortisol, thyroid hormones, and others.