The mechanical properties of the respiratory system are paramount in converting neural output into ventilation. The highly compliant chest wall of the newborn results in chest distortion and volume loss during inspiration and, as the chest is also unable to resist the inward recoil of the lung, there is a reduction in lung volume at end expiration (functional residual capacity) and a tendency for alveoli to collapse. Vagal innervation of the lungs and airways is responsible for eliciting various reflexes that result in the dynamic modification of respiratory mechanics and an improvement in ventilation. From the first breath, the newborn increases the frequency of augmented breaths to improve lung compliance and prolongs the expiratory time constant in order to increase the amount of air remaining in the lung at end expiration and help prevent lung collapse. This review examines the respiratory mechanics of the mammalian neonate at birth and during early development together with the vagal reflexes that are responsible for the dynamic modification of respiratory mechanics in order to ensure that effective gas exchange occurs from birth.