The pathologic classification of diffuse lung disease in children and adolescents has undergone revision in recent years in response to rapid developments and new discoveries in the field. A number of important advancements have been made in the last 10 years including the description of new genetic mutations causing severe lung disease in infants and children, as well as the description of new pathologic entities in infants. These recently described entities, including ABCA3 surfactant disorders, pulmonary interstitial glycogenosis, and neuroendocrine cell hyperplasia of infancy, are being recognized with increasing frequency. This review will include brief discussion of the etiology and pathogenesis of the major groups of diffuse lung disease in children. Histopathologic features are discussed for each of the major categories of diffuse lung disease in children, beginning with the genetic, developmental, and alveolar growth disorders common in infancy, followed by brief discussion of airway diseases, immunologic diseases, and pulmonary vascular diseases seen more commonly in older children. A protocol for handling pediatric wedge lung biopsies is also discussed, which optimizes the diagnostic yield of lung biopsies in this population.