Little is known about whether exposure of the fetus to alcohol alters pulmonary development or function. This study aimed to determine whether low-moderate ethanol (EtOH) exposure throughout gestation alters structural and non-respiratory functional aspects of the fetal and postnatal lung. Sprague–Dawley rats were fed an ad libitum liquid diet ±6% v/v EtOH daily throughout pregnancy, achieving a plasma ethanol (EtOH) concentration of 0.03%. Gene and protein expression was determined in pulmonary tissue collected from fetuses at embryonic day (E) 20 and adult offspring. The percentage of airspace and alveolar size was measured in pulmonary tissue collected at postnatal day (PN) 1. At E20, EtOH-exposed fetuses had decreased aquaporin 5 mRNA levels and a non-significant trend for decreased epithelial sodium channel type α; expression of other pulmonary fluid homeostatic and development genes and surfactant protein genes were not different between groups. At PN1, there was no difference between EtOH-exposed and control offspring in the distal airspace percentage or diameter. At 8 months, collagen type III α1 gene expression was upregulated in EtOH-exposed male offspring; this was associated with increased collagen deposition at 10 months. At 19 months, male EtOH-exposed offspring had a 25% reduction in the protein levels of surfactant protein B. The alterations observed in male EtOH-exposed offspring suggest chronic low-moderate prenatal EtOH-exposure during development may result in increased pulmonary fibrosis. Such an alteration would decrease the respiratory capacity of the lung.