This study was designed to test the hypothesis that inhalation of nitric oxide by lambs delivered prematurely would result in increased systemic arterial blood oxygen tension and decreased pulmonary vascular resistance. Eleven premature fetal lambs were delivered by cesarean section at 126–127 d gestation. One hundred min after the onset of ventilation, nitric oxide gas was added to the lambs' breathing mixture. The animals were exposed in random order to 5 ppm for 10 min, 20 ppm for 10 min, and 20 ppm for 20 min. Each treatment period was preceded by and followed by a 10-min washout period. When compared with the washout (control) periods, all three treatment periods resulted in an improvement in both the systemic arterial blood oxygen tension and the physiologic intrapulmonary shunt. Inhalation of nitric oxide also resulted in a selective decrease in pulmonary arterial blood pressure. Comparisons between the different treatment groups revealed a further improvement in blood oxygenation and pulmonary hemodynamics when using the higher concentration of nitric oxide. Interestingly, the rise in arterial blood oxygenation continued after inhaling 20 ppm nitric oxide for more than 10 min.