Twenty preterm infants recovering from respiratory distress syndrome at 1 week of age were randomized in this study either to a control or a treatment group. Those treated received a single daily dose of furosemide (1 mg/kg) intravenously. Pulmonary compliance was observed to improve significantly at two hours in the treated group, as compared with that in the controls. The calculated alveolar-arterial oxygen gradient was noted to decrease two hours after furosemide and to remain decreased over the four-day period in the treated group. This improvement in lung function was not secondary to diuresis in the infants treated with furosemide. We conclude that furosemide may have a direct pulmonary effect and improve lung function acutely as well as with chronic administration.