To study the effects of furosemide therapy in infants with chronic lung disease (CLD), a double-blind controlled trial was designed. Seventeen infants with evidence of CLD (oxygen requirements greater than 30% at greater than 3 weeks of age and chest radiographic findings consistent with CLD) were studied. Pulmonary function was measured immediately before, and after 48 hours and 7 days of treatment with furosemide (1 mg/kg/12 hr intravenously or 2 mg/kg/12 hr orally) or placebo. Clinical status improved in six of seven infants who received furosemide and in two of 10 infants who received placebo (P less than 0.002). In the furosemide group, ventilator and oxygen requirements decreased (P less than 0.003); minute ventilation, alveolar ventilation, and dynamic compliance increased; and venous admixture decreased (P less than 0.05). There were no significant changes in the placebo group. Our findings suggest that furosemide significantly improves lung function during therapy in infants with CLD and allows earlier weaning from ventilatory support and supplemental oxygen.