Despite its potentially adverse effects on lung development and function, supplemental oxygen is often used to treat premature infants in respiratory distress. To understand how neonatal hyperoxia can permanently disrupt lung development, we previously reported increased lung compliance, greater alveolar simplification, and disrupted epithelial development in adult mice exposed to 100% inspired oxygen fraction between postnatal days 1 and 4. Here, we investigate whether oxygen-induced changes in lung function are attributable to defects in surfactant composition and activity, structural changes in alveolar development, or both. Newborn mice were exposed to room air or 40%, 60%, 80%, or 100% oxygen between postnatal days 1 and 4 and allowed to recover in room air until 8 wk of age. Lung compliance and alveolar size increased, and airway resistance, airway elastance, tissue elastance, and tissue damping decreased, in mice exposed to 60-80% oxygen; changes were even greater in mice exposed to 100% oxygen. These alterations in lung function were not associated with changes in total protein content or surfactant phospholipid composition in bronchoalveolar lavage. Moreover, surface activity and total and hydrophobic protein content were unchanged in large surfactant aggregates centrifuged from bronchoalveolar lavage compared with control. Instead, the number of type II cells progressively declined in 60-100% oxygen, whereas levels of T1alpha, a protein expressed by type I cells, were comparably increased in mice exposed to 40-100% oxygen. Thickened bundles of elastin fibers were also detected in alveolar walls of mice exposed to > or = 60% oxygen. These findings support the hypothesis that changes in lung development, rather than surfactant activity, are the primary causes of oxygen-altered lung function in children who were exposed to oxygen as neonates. Furthermore, the disruptive effects of oxygen on epithelial development and lung mechanics are not equivalently dose dependent.