Successful management of severe PPHN depends on the application of appropriate strategies to manage the cardiopulmonary interactions that characterize this syndrome. Manifestations of PPHN often involve dysfunctional pulmonary vasoregulation, with suprasystemic pulmonary vascular resistance causing extrapulmonary shunting, pulmonary parenchymal disease causing intrapulmonary shunting, and systemic hemodynamic deterioration. Inhaled NO can cause marked improvement in oxygenation when optimal lung inflation is achieved and systemic blood volume and vascular resistance are adequate. Although concern has been expressed regarding potential increases in costs associated with this new therapy, we have found that the successful application of inhaled NO in PPHN has reduced costs of hospitalization and duration of hospital stay by approximately 50% and 40%, respectively. However, inhaled NO alone is unlikely to cause sustained improvement in oxygenation in neonatal hypoxemic respiratory failure associated with severe parenchymal lung disease without extrapulmonary shunting. Inhaled NO may be an important tool in the management of severe PPHN when its application is limited to patients with severe extrapulmonary shunting and vigilant attention is given to changes in the clinical course.