The fetal and neonatal lung are very sensitive to environmental conditions, which can alter lung development, leading to reduced lung function and increased risk of respiratory illness later in life. This is magnified in that the human lung primarily develops during prenatal life and infancy, after which it increases in size but not complexity. Therefore, early life events can lead to permanent structural changes that translate into lifelong alterations in pulmonary function with increased risk of respiratory disease and, potentially, earlier deterioration of lung function during the normal aging process. The effect of these exposures is dependent on individual susceptibilities, particularly genetic polymorphism and epigenetic changes, as well as the timing, duration, and level of exposures. In utero and early postnatal environmental factors that have been linked to changes in lung development include maternal use of tobacco products during pregnancy, secondhand tobacco smoke exposure, nicotine, and environmental pollution including air pollution and indoor wood-/cookstove exposures. This chapter will focus on how these exposures lead to altered lung morphology and the resulting clinical consequences with particular focus on the effects of in utero tobacco product exposure. Future environmental trends likely to influence lung development include e-cigarette usage and climate change.