Maternally derived inflammatory mediators, such as IL-6 and IL-8, contribute to preterm delivery, low birth weight, and respiratory insufficiency, which are routinely treated with oxygen. Premature infants are at risk for developing adult-onset cardiac, metabolic, and pulmonary diseases. Long-term pulmonary consequences of perinatal inflammation are unclear. We tested the hypothesis that a hostile perinatal environment induces profibrotic pathways resulting in pulmonary fibrosis, including persistently altered lung structure and function. Pregnant C3H/HeN mice injected with LPS or saline on embryonic day 16. Offspring were placed in room air (RA) or 85% O(2) for 14 days and then returned to RA. Pulmonary function tests, microCTs, molecular and histological analyses were performed between embryonic day 18 and 8 wk. Alveolarization was most compromised in LPS/O(2)-exposed offspring. Collagen staining and protein levels were increased, and static compliance was decreased only in LPS/O(2)-exposed mice. Three-dimensional microCT reconstruction and quantification revealed increased tissue densities only in LPS/O(2) mice. Diffuse interstitial fibrosis was associated with decreased micro-RNA-29, increased transforming growth factor-β expression, and phosphorylation of Smad2 during embryonic or early fetal lung development. Systemic maternal LPS administration in combination with neonatal hyperoxic exposure induces activation of profibrotic pathways, impaired alveolarization, and diminished lung function that are associated with prenatal and postnatal suppression of miR-29 expression.