The interrelationship between the role of surfactant and a sustained inflation (SI) to aid ex utero transition of the preterm lung is unknown. We compared the effect of surfactant administered before and after an initial SI on gas exchange, lung mechanics, spatial distribution of ventilation, and lung injury in preterm lambs. Gestational-age lambs (127 days; 9 per group) received 100 mg/kg of a surfactant (Curosurf) either prior (Surf+SI) or 10 min after birth (SI+Surf). At birth, a 20-s, 35 cmH₂O SI was applied, followed by 70 min of positive pressure ventilation. Oxygenation, carbon dioxide removal, respiratory system compliance, end-expiratory thoracic volume (via respiratory inductive plethysmography), and distribution of end-expiratory volume and ventilation (via electrical impedance tomography) were measured throughout. Early markers of lung injury were analyzed using quantitative RT-PCR. During the first 15 min, oxygenation, carbon dioxide removal, and compliance were better in the Surf+SI group (all P < 0.05). End-expiratory volume on completion of the sustained inflation was higher in the Surf+SI group than the SI+Surf group; 11 ± 1 ml/kg vs. 7 ± 1 ml/kg (mean ± SE) ( P = 0.043; t-test), but was not different at later time points. Although neither achieved homogenous aeration, spatial ventilation was more uniform in the Surf+SI group throughout; 50.1 ± 10.9% of total ventilation in the left hemithorax at 70 min vs. 42.6 ± 11.1% in the SI+Surf group. Surf+SI resulted in lower mRNA levels of CYR61 and EGR1 compared with SI+Surf ( P < 0.001, one-way ANOVA). Surfactant status of the fetal preterm lung at birth influences the mechanical and injury response to a sustained inflation and ventilation by changing surface tension of the air/fluid interface.