The work proposed herein will determine the precise manufacturing methods necessary to improve the delivery of pulmonary surfactant in the treatment of Neonatal Respiratory Distress Syndrome, while simultaneously achieving greater cost-effectiveness of the dosage form. Current surfactant preparations are too viscous for aerosolization and must be delivered to the lung by intratrachaeal instillation of a large, potentially obstructive bolus which is poorly distributed. By capitalizing on our experience in liposome production and characterization, we will convert an existing surfactant preparation into a submicron dispersion which can be aerosolized into 1-3 micromole droplets. In pilot experiments we have revealed a potential increase in drug efficacy coincident with an almost ten-fold reduction in drug cost. Quantity and distribution of labels incorporated into surfactant lipids in the aerosol will be followed in order to demonstrate more extensive deposition of such aerosols in the lung than that achieved with previous techniques. Delivery, distribution and efficacy of the aerosolizable surfactant will be demonstrated using a suit-depleted newborn piglet model. Delivery and distribution will be measured by whole body imaging of radiolabel, while efficacy will be monitored by improvements in blood gas values and in lung compliance.