Many women are unable to quit smoking during pregnancy and therefore are prescribed drugs, including nicotine (nicotine replacement therapy [NRT]), to aid with smoking cessation. However, the consequences to the offspring of pregnant NRT users have not been well studied. The goals of this study were to determine the consequences of fetal and neonatal exposure to nicotine on lung development and function. Female rats were exposed to nicotine for 2 weeks prior to mating until weaning. Lungs were collected from saline and nicotine-treated rats from birth to adulthood to assess postnatal lung structure and function. Although nicotine exposure altered alveolarization at weaning, an effect that resolved by adulthood, it did not affect lung function at any of the ages investigated. However, nicotine exposure significantly decreased lung vascularization. The current study suggests that perinatal exposure to nicotine alters lung development, an effect which may be mediated via decreased vascular endothelial growth factor (VEGF) signaling.