Alveolar capillary dysplasia (ACD), with or without pulmonary vein misalignment is a uniformly fatal cause of persistent pulmonary hypertension and respiratory failure, first described in 1981. We report the case of ACD in a full term newborn with post mortem pathologic confirmation. Sixty five cases have been reported in the literature, most are sporadic, but a few cases of familial ACD suggest an autosomal recessive inheritance. In 55% of the reported cases of ACD other cardiovascular, digestive or urogenital anomalies were associated. ACD is presumed to be a primary capillary disorder. It affects full-term neonates who exhibit respiratory distress during the early post natal period due to pulmonary hypertension and die within 3 weeks of birth. Histologic findings include a decrease in the number of alveolar capillaries, which are placed centrally within the intralobular septa, ectatic veins accompany the bronchovascular bundles instead of being in their normal position in the interlobular septum, and muscularized pulmonary arteries extend to the distal level. Prognosis is very poor, intravenous prostacyclin with inhaled nitric oxide have been reported in the cases with the best survival.