Alveolar capillary dysplasia with misalignment of pulmonary veins (ACD/MPV) is a rare congenital condition characterised by abnormal development of the pulmonary vasculature. It manifests as severe, refractory hypoxaemia and persistent pulmonary hypertension of the newborn (PPHN), often resulting in rapid progression to respiratory failure and early death despite aggressive interventions. Diagnosis relies on distinct histological features. We present the case of a term neonate born to parents with a history of third-degree consanguinity. The mother, a primigravida, delivered a male neonate vaginally with meconium-stained amniotic fluid. Despite a normal antenatal course, the neonate developed severe respiratory distress shortly after birth, which progressed rapidly. The baby exhibited severe hypercarbia and progressive hypoxia, with clinical and echocardiographic parameters suggestive of PPHN. Aggressive treatment, including high-frequency oscillatory ventilation, surfactant administration, vasodilators and inotropes, did not improve the condition. Persistent severe respiratory acidosis and worsening hypoxia ensued, ultimately leading to death due to refractory respiratory failure. A lung biopsy performed after the neonate's death confirmed ACD/MVP as the cause. Initially suspected as PPHN secondary to meconium aspiration syndrome, poor response to treatment redirected focus to congenital lung disease. This case emphasises the importance of recognising ACD/MPV in neonates with severe respiratory distress and pulmonary hypertension unresponsive to standard treatments. Early lung biopsy, despite potential risks, can confirm the diagnosis, guide prognosis and avoid ineffective therapies.