Postnatal lung development in the tammar wallaby was investigated using transmission electron microscopy and stereological morphometry. Volume densities of interstitial, epithelial and endothelial tissue and capillaries in the parenchymal septa were measured as were surface densities of the airspaces and gas exchange capillaries. Absolute changes in these parameters were related to body mass. Three phases of development were identified. During the ectothermic period, in the first 70 days after birth when the lung was in the terminal air sac phase, the most marked change was an increase in volume density of septal interstitium. The transitional period between ectothermy and endothermy, between 70 and 180 days after birth, corresponded to the alveolar phase and was characterised by accelerated increase in air space surface area. Maturation of the parenchymal septa and establishment of the mature capillary system occurred largely after 180 days when endothermy was established. The anatomical diffusion factor in the tammar wallaby adult is similar to that for eutherians.