Inhaled Nitric Oxide (INO) improves oxygenation and decreases mortality in newborn infants with persistent pulmonary hypertension. However, the effect of INO on ventilation in preterm infants with healthy lungs is unknown. We hypothesize that INO by preferentially vasodilating capillaries in well ventilated areas would decrease dead space and improve gas exchange in healthy preterm infants. To test this hypothesis, we studied 6 healthy preterm infants[BW 1100±237 g (Mean±SEM); SW 1780±140 g; GA 28±1 wk; PNA 54±14 d] during quiet and REM sleep. A flow-through system and Beckman analyzers were used to measure ventilation and alveolar gases. After a control period in 21% O2, infants inhaled 5 ppm of NO for one hour. In quiet sleep, minute ventilation decreased from 0.305±0.011 (control), to 0.260±0.008 l/min/kg (INO; p<0.001). In REM sleep, it decreased from 0.299±0.007 (control), to 254±0.011 l/min/kg (INO; p<0.001). These changes in ventilation were primarily related to a decrease in frequency during quiet sleep [45±3 breaths/minute (control) vs 36±1 (INO); p<0.01] and to a decrease in tidal volume during REM sleep [7.1±0.3 ml/kg (control) vs 6.6±0.3 (INO); p<0.05]. No significant differences were observed in the number and the density of apneas per hour in any sleep state. Oxygenation, as measured by O2 saturation and TcPO2, did not change significantly during INO in any sleep state. Alveolar PO2 was 100±2 Torr (quiet) and 97±2 (REM) during control and 97±3 Torr (quiet) and 100±4 (REM) during INO (both p=NS). Alveolar PCO2 decreased from 33±1 Torr (control) to 32±1 (INO; p=NS) during quiet sleep and from 31±1 Torr(control), to 29±1 (INO; p<0.05) during REM sleep. These findings suggest that in healthy preterm infants INO makes ventilation more effective; this is indicated by a decrease in minute ventilation during quiet and REM sleep without significant changes in oxygenation and with a slight decrease in alveolar PCO2. We speculate that the more effective ventilation observed during INO is related to capillary recruitment in poorly perfused ventilated alveolar units with a consequent decrease in dead space.