During a series of studies investigating the maturational response to antenatal glucocorticoids, we observed that 70% of lambs delivered at 128 d gestation (term = 150 d), 24 h after a single injection of 0.5 mg/kg betamethasone or betamethasone + L-thyroxine (15 microgram/kg), developed pulmonary interstitial emphysema (PIE), compared with less than 5% of control animals or animals delivered 48 h or 7 d after hormone treatment. This study examined whether the lungs of animals that developed PIE were functionally or structurally different from those that did not. Lambs were mechanically ventilated for 40 min after cesarean section delivery. Hormone-treated animals with PIE were ventilated at similar peak inspiratory pressure (PIP) to control animals, whereas those without PIE were able to be ventilated at significantly lower PIP. Volume-dependent elastance (E2V), which provides an index of overdistension during mechanical ventilation, was lowest in PIE animals. Alveolar architecture was distorted in almost all ventilated animals, the most severe distortion occurring in PIE animals. There was no evidence of excessive alveolar wall thinning in PIE animals, although parenchymal collagen was 30% lower, and elastin 120% higher than in control animals. PIE was associated with structural differences, but not with overventilation.