Rationale: Early in life, lung growth can occur by alveolarization, an increase in the number of alveoli, as well as expansion. We hypothesized that if lung growth early in life occurred primarily by alveolarization, then the ratio of pulmonary diffusion capacity of carbon monoxide (DL CO ) to alveolar volume (V A ) would remain constant; however, if lung growth occurred primarily by alveolar expansion, then DL CO /V A would decline with increasing age, as observed in older children and adolescents. Objectives: To evaluate the relationship between alveolar volume and pulmonary diffusion capacity early in life. Methods: In 50 sleeping infants and toddlers, with equal number of males and females between the ages of 3 and 23 months, we measured DL CO and V A using single breath-hold maneuvers at elevated lung volumes. Measurements and Main Results: DL CO and V A increased with increasing age and body length. Males had higher DL CO and V A when adjusted for age, but not when adjusted for length. DL CO increased with V A ; there was no gender difference when DL CO was adjusted for V A . The ratio of DL CO /V A remained constant with age and body length. Conclusions: Our results suggest that surface area for diffusion increases proportionally with alveolar volume in the first 2 years of life. Larger DL CO and V A for males than females when adjusted for age, but not when adjusted for length, is primarily related to greater body length in boys. The constant ratio for DL CO /V A in infants and toddlers is consistent with lung growth in this age occurring primarily by the addition of alveoli rather than the expansion of alveoli.Keywords: pulmonary diffusion capacity; alveolar volume; lung development The lung, which provides surface area for gas exchange, begins alveolarization of the lung parenchyma in late gestation; however, the number of alveoli present at birth is estimated to be less than 20% of the number in adults (1-3). In addition, alveolar size of an infant is smaller than the alveolar size of an adult (1-3). Therefore, postnatal growth and development of the lung parenchyma includes increases in number as well as size of alveoli. Lung volume early in life is thought to occur primarily by the addition of alveoli during the rapid phase of somatic growth, and then, following alveolarization of the lung parenchyma, lung volume increases by the expansion of existing alveoli. However, from the limited number of morphometric studies of relatively few autopsied lungs from infants and toddlers, which have used differing morphometric techniques to estimate alveolar number, it remains unclear whether the addition of alveoli is complete by 6 months, 2 to 3 years, or 8 years of age (2, 4-6).In vivo physiologic measurements of alveolar volume (V A ) and pulmonary diffusing capacity for carbon monoxide (DL CO ) can provide a functional assessment of the volume and surface area available for gas exchange, which indirectly reflects the cumulative effects of alveolar number and size. In older subjects from 8 years of age to...