This paper examines critical aspects of sensors and measurement instruments used in the clinical care of mechanically ventilated newborn babies. The key variables for ventilator control are described and sensors for gas flow and volume are evaluated. The continuous real-time monitoring of critical physical and chemical variables can provide important data that can be used to optimize mechanical ventilator parameters. The options for invasive and noninvasive measurement approaches are introduced and issues relating to the trade-offs between measurement precision and accuracy and patient safety are discussed. Sensors for blood gases, hemodynamic variables, pulmonary mechanics parameters, and ventilator characteristics are described. Accurate gas flow sensors are needed for the effective delivery of an optimized ventilator therapy; the hot-wire anemometer and the pneumotachograph are evaluated. A preliminary study to develop a rationale based on artificial intelligence decision trees for choosing sensors and instruments is presented.