We assessed the changes in regional lung function following instillation of surfactant in a model of respiratory distress syndrome (RDS) induced by whole lung lavage and mechanical ventilation, in 8 anaesthetized, paralyzed, and mechanically ventilated New-Zealand White rabbits. Regional specific ventilation (sV· ) was measured using K-edge subtraction synchrotron CT imaging during xenon washin. Lung regions were classified as poorly-aerated (PA), normally aerated (NA) or hyperinflated (HI) based on regional density. A functional category was defined within each class, based on sV· distribution (High, Normal, and Low). Airway resistance (Raw), respiratory tissue damping (G) and elastance (H) were measured by forced oscillation technique (FOT) at low frequencies before and after whole lung saline lavage-induced (100 ml/kg) RDS, and 5 and 45 minutes after intratracheal instillation of beractant (75 mg/kg). Surfactant instillation improved Raw, G and H (p<0.05, respectively) and gas exchange and decreased atelectasis (p<0.001). It also significantly improved lung aeration and ventilation in atelectatic lung regions. However, in regions that had remained normally-aerated after lavage, it decreased regional aeration and increased sV· (p<0.001) and sV· heterogeneity. Although surfactant treatment improved both central airway and tissue mechanics and improved regional lung function of initially poorly-aerated and atelectatic lung, it deteriorated regional lung function when local aeration was normal prior to administration. Local mechanical and functional heterogeneity can potentially contribute to the worsening of RDS, and gas exchange. These data underscore the need for reassessing the benefits of routine prophylactic vs. CPAP and early "rescue" surfactant therapy in very immature infants.