Surfactant therapy has been proven effective in the prevention and treatment of respiratory distress syndrome. Over 6,000 infants have been studied in randomized controlled trials. These studies have demonstrated that both prophylactic administration of surfactant and administration of surfactant to premature infants with established respiratory distress syndrome will decrease the risk of pneumothorax and decrease the risk of mortality. Currently, over 50% of very low birth weight infants in North America receive some sort of surfactant preparation. However, many questions remain regarding optimal usage of surfactant preparations. Recent randomized controlled trials have evaluated issues regarding surfactant dosage, treatment strategy, method of administration, and surfactant preparation. Initial doses in the range of 100–200 mg/kg with repeat doses to selected infants who relapse appears to be the best approach to therapy. Prophylactic surfactant therapy leads to a small but statistically significant reduction in the risk of pneumothorax and mortality. The clinical relevance of these advantages and the cost effectiveness of this care remains under debate. A variety of methods of administration have been used in randomized controlled trials. Trials which compare these methods of administration demonstrate the adequacy of currently tested bolus administration. However, other methods of administration, such as slow infusion of surfactant leads to uneven distribution of surfactant and poor response. Both synthetic surfactants and natural surfactant extracts have been proven effective in the care of these infants. However, randomized controlled trials which directly compare these two preparations demonstrate a small advantage to the use of natural surfactant extracts. Natural surfactant extracts improve initial ventilatory status and decrease the risk of pneumothorax. Surfactant replacement therapy has proven to be effective in the treatment of very low birth weight premature infants. Current clinical trials support the early institution of treatment either prophylactically or as soon as possible in intubated babies with signs of respiratory distress syndrome. Repeat treatment may be important in optimizing outcome due to surfactant inactivation. Currently available natural surfactant extracts improve early clinical outcome and decrease pneumothorax compared to the available synthetic preparations.