Advances in the physiology, biochemistry, molecular and cell biology of the pulmonary surfactant system transformed the clinical care and outcome of preterm infants with respiratory distress syndrome. The molecular era of surfactant biology provided genetic insights into the pathogenesis of pulmonary disorders, previously termed 'idiopathic', that affect newborn infants, children and adults. Knowledge related to the structure and function of the surfactant proteins and their roles in alveolar homeostasis has provided new diagnostic, prognostic and therapeutic tools to advance our understanding of the causes and treatments of acute and chronic lung diseases. Severe lung disease in newborn infants and older patients is caused by mutations in genes regulating alveolar epithelial cells and surfactant homeostasis. Mutations in genes encoding the surfactant proteins, transcription factors critical for alveolar morphogenesis and surfactant clearance, are now known to play important roles in the pathogenesis of chronic lung diseases. Identification of the genes underlying the diseases of alveolar homeostasis is useful for the diagnosis of lung disease before and after birth.