The endothelium-derived vasodilator molecules prostaglandin I2 (PGI2) and nitric oxide (NO) are critically involved in the dramatic increase in pulmonary blood flow that occurs during cardiopulmonary transition at birth. Studies in animal and cell culture models have revealed that there is increased PGI2 and NO production in the pulmonary circulation of the late fetus in direct response to increased oxygenation, and that this response is unique to the pulmonary endothelium. Additional work has demonstrated that there is normally marked upregulation in the expression of the key synthetic enzymes cyclooxygenase type I and endothelial NO synthase in the lung during late gestation, thereby maximizing the capacity for vasodilator production at the time of birth. Furthermore, studies in animal models of neonatal pulmonary hypertension indicate that attenuated expression of these genes may frequently contribute to the pathogenesis of the disorder. A greater understanding of the mechanisms regulating PGI2 and NO synthesis in the developing lung will potentially lead to novel therapies for neonatal pulmonary hypertension aimed at optimizing endogenous vasodilator production.