Maternal bacterial infections adversely affect lung development by crossing the placental barrier and infecting the developing fetus. The underlying mechanism negatively affecting pulmonary development remains unknown. Herein, we investigated whether a systemic maternal infection affects postnatal inflammation and alveolar development. Pregnant rats were injected with 2.5 mg/kg LPS on day 20 and 21 (term = 22 days). Postnatal (PN0-21) mRNA and protein expression of cytokines (IL-1, IL-6, L-10 CXCL1/2, TNF) and genes implicated in alveologenesis (tropoelastin, lysyl oxidase (LOX), lysyl oxidase-like (LOXL)1, tenascin-C (TNC), fibulin 5, vascular endothelial growth factor (VEGF-A), VEGF receptor (VEGFR)2, VEGFR1, platelet-derived growth factor (PDGF)A, PDGFB, and PDGFR) were quantified by real-time PCR and beadlyte technology. Lung transcript and protein levels of IL-1, IL-6 and CXCL1/CXCL2 were significantly greater in LPS-exposed pups than those of control pups at PN0, 2, 6, 10 and 14. Bronchioalveolar lavage fluid (BALF) of LPS-exposed animals contained significantly more macrophages at PN2 and 14 than BALF of control pups. Morphometric analysis revealed that LPS-exposed animals had fewer and larger alveoli, fewer secondary septa and decreased peripheral vessel density when compared to control pups. This morphological delay in alveolar development disappeared after PN14. Tropoelastin, LOXL1, VEGF, VEGFR2, and PDGFR mRNA expression of LPS-exposed animals was significantly greater than those of control animals in PN2-14 lungs. TNC, LOX, Fibulin 5, VEGFR1, PDGFA and PDGFB expression was not affected by maternal LPS exposure. Together, the data demonstrate that maternal exposure to endotoxin results in a prolonged pulmonary inflammation postnatally, altered gene expression of molecules implicated in alveologenesis and delayed morphologic maturation of the lung.