Bronchopulmonary dysplasia (BPD) is the most common cause of morbidity and mortality in preterm infants. A key histopathological feature of BPD is stunted late lung development, where the process of alveolarization—the generation of alveolar gas exchange units—is impeded, through mechanisms that remain largely unclear. As such, there is interest in the clarification both of the pathomechanisms at play in affected lungs, and the mechanisms of de novo alveoli generation in healthy, developing lungs. A better understanding of normal and pathological alveolarization might reveal opportunities for improved medical management of affected infants. Furthermore, disturbances to the alveolar architecture are a key histopathological feature of several adult chronic lung diseases, including emphysema and fibrosis, and it is envisaged that knowledge about the mechanisms of alveologenesis might facilitate regeneration of healthy lung parenchyma in affected patients. To this end, recent efforts have interrogated clinical data, developed new—and refined existing—in vivo and in vitro models of BPD, have applied new microscopic and radiographic approaches, and have developed advanced cell-culture approaches, including organoid generation. Advances have also been made in the development of other methodologies, including single-cell analysis, metabolomics, lipidomics, and proteomics, as well as the generation and use of complex mouse genetics tools. The objective of this review is to present advances made in our understanding of the mechanisms of lung alveolarization and BPD over the period 1 January 2017–30 June 2019, a period that spans the 50th anniversary of the original clinical description of BPD in preterm infants.