Ambient oxygen concentration and vascular endothelial growth factor (VEGF)-A are vital in lung development. Since hypoxia stimulates VEGF-A production and hyperoxia reduces it, we hypothesized that VEGF-A down-regulation by exposure of airways to hyperoxia may result in abnormal lung development. An established model of in vitro rat lung development was used to examine the effects of hyperoxia on embryonic lung morphogenesis and VEGF-A expression. Under physiologic conditions, lung explant growth and branching is similar to that seen in vivo. However, in hyperoxia (50% O2) the number of terminal buds and branch length was significantly reduced after 4 d of culture. This effect correlated with a significant increase in cellular apoptosis and decrease in proliferation compared with culture under physiologic conditions. mRNA for Vegf164 and Vegf188 was reduced during hyperoxia and addition of VEGF165, but not VEGF121, to explants grown in 50% O2 resulted in partial reversal of the decrease in lung branching, correlating with a decrease in cell apoptosis. Thus, hyperoxia suppresses VEGF-A expression and inhibits airway growth and branching. The ability of exogenous VEGF165 to partially reverse apoptotic effects suggests this may be a potential approach for the prevention of hyperoxic injury.