We briefly review recent progress in the fabrication and characterization of air-core photonic band-gap fibers. These are silica fibers with an hexagonal array of air holes in the cladding, and a larger air hole creating the core. Improved structural uniformity transverse to the fiber axis and down the fiber axis has yielded fibers with better transmission characteristics. We have measured a minimum loss of 13 dB/km at 1500 nm for a 100 m length of our fiber. This is a marked improvement over previous loss measurements for air-core fibers of any kind. A comparison of observed spectra and calculated gap modes suggests that coupling between surface modes and core modes may be an important contributor to the remaining loss. We present a detailed analysis of the expected losses associated with mode crossings between the fundamental core mode and surface modes, showing that Lorentzian-shaped loss peaks are predicted.© (2003) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.