Tobacco smoke and nicotine exposure during prenatal and postnatal life can impair lung development, alter the immune response to viral infections, and increase the prevalence of wheezing during childhood. The following review examines recent discoveries in the fields of lung development and tobacco and nicotine exposure, emphasizing studies published within the last 5 years. In utero tobacco and nicotine exposure remains common, occurring in approximately 10% of pregnancies within the United States. Exposed neonates are at increased risk for diminished lung function, altered central and peripheral respiratory chemoreception, and increased asthma symptoms throughout childhood. Recently, genomic and epigenetic risk factors, such as alterations in DNA methylation, have been identified that may influence the risk for long-term disease. This review examines the impact of prenatal tobacco and nicotine exposure on lung development with a particular focus on nicotinic acetylcholine receptors. In addition, this review examines the role of prenatal and postnatal tobacco smoke and nicotine exposure and its association with augmenting infection risk, skewing the immune response toward a T-helper type 2 bias and increasing risk for developing an allergic phenotype and asthmalike symptoms during childhood. Finally, this review outlines the respiratory morbidities associated with childhood secondhand smoke and nicotine exposure and examines genetic and epigenetic modifiers that may influence respiratory health in infants and children exposed to in utero or postnatal tobacco smoke.