The contribution of Ureaplasma respiratory tract colonization to the pathogenesis of bronchopulmonary dysplasia in preterm infants has been debated for over 20 y. We review the current understanding of the role of inflammation in altered developmental signaling in the preterm lung and the evidence from human studies and experimental models that Ureaplasma-mediated inflammation produces the BPD phenotype. We propose that Ureaplasma infection initiated in utero and augmented postnatally by exposure to volutrauma and oxygen elicits a sustained, dysregulated inflammatory response in the immature lung that impairs alveolarization, and stimulates myofibroblast proliferation and excessive collagen and elastin deposition. Potential strategies to prevent or ameliorate the effects of Ureaplasma infection in utero and in the preterm lung are discussed.