PURPOSE OF REVIEW: Bronchopulmonary dysplasia continues to be an important cause of morbidity in premature infants who require mechanical ventilation. Management strategies have historically focused on normalizing blood gases but new research suggests that a higher PCO2 level may be well tolerated in premature infants. There are physiologic rationale and recent experimental data to support the potential benefits of permissive hypercapnia. RECENT FINDINGS: Higher PCO2 levels may allow a reduction in ventilatory support which reduces the risk of lung injury in intubated patients. Targeting PCO2 levels above 45 mmHg has been tested in randomized controlled trials. These trials report that neonates managed with permissive hypercapnia have a shorter duration of mechanical ventilation and reduced severity of bronchopulmonary dysplasia without an increase in adverse events. SUMMARY: Permissive hypercapnia appears as a safe and effective management strategy to decrease morbidity from bronchopulmonary dysplasia in premature infants. Although the preliminary results are promising, further research is needed to determine whether this strategy improves pulmonary outcomes without adverse effects.