Hypoxia causes abnormal neonatal pulmonary artery remodeling (PAR) and inhibition of alveolar development (IAD). Transforming growth factor (TGF)-β is an important regulator of lung development and repair from injury. We tested the hypothesis that inhibition of TGF-β signaling attenuates hypoxia-induced PAR and IAD. Mice with an inducible dominant-negative mutation of the TGF-β type II receptor (DNTGFβRII) and nontransgenic wild-type (WT) mice were exposed to hypoxia (12% O2) or air from birth to 14 days of age. Expression of DNTGFβRII was induced by 20 μg/g ZnSO4 given intraperitoneally daily from birth. PAR, IAD, cell proliferation, and expression of extracellular matrix (ECM) proteins were assessed. In WT mice, hypoxia led to thicker, more muscularized resistance pulmonary arteries and impaired alveolarization, accompanied by increases in active TGF-β and phosphorylated Smad2. Hypoxia-induced PAR and IAD were greatly attenuated in DNTGFβRII mice given ZnSO4 compared with WT control mice and DNTGFβRII mice not given ZnSO4. The stimulatory effects of hypoxic exposure on pulmonary arterial cell proliferation and lung ECM proteins were abrogated in DNTGFβRII mice given ZnSO 4. These data support the conclusion that TGF-β plays an important role in hypoxia-induced pulmonary vascular adaptation and IAD in the newborn animal model. Copyright © 2008 the American Physiological Society.