Despite tremendous technological and therapeutic advances, bronchopulmonary dysplasia (BPD) remains a leading cause of respiratory morbidity in very low birth weight infants, and there are no effective preventive and/or therapeutic options. We have previously reported that hyperoxia-induced neonatal rat lung injury might be prevented by rosiglitazone (RGZ). Here, we characterize 1) perturbations in wingless/Int (Wnt) and transforming growth factor (TGF)-β signaling, and 2) structural aberrations in lung morphology following 7-day continuous in vivo hyperoxia exposure to neonatal rats. We also tested whether treatment of neonatal pups with RGZ, concomitant to hyperoxia, could prevent such aberrations. Our study revealed that hyperoxia caused significant upregulation of Wnt signaling protein markers lymphoid enhancer factor 1 (Lef-1) and β-catenin and TGF-β pathway transducers phosphorylated Smad3 and Smad7 proteins in whole rat lung extracts. These changes were also accompanied by upregulation of myogenic marker proteins α-smooth muscle actin (α-SMA) and calponin but significant downregulation of the lipogenic marker peroxisome proliferator-activated receptor-γ (PPARγ) expression. These molecular perturbations were associated with reduction in alveolar septal thickness, radial alveolar count, and larger alveoli in the hyperoxia-exposed lung. These hyperoxia-induced molecular and morphological changes were prevented by systemic administration of RGZ, with lung sections appearing near normal. This is the first evidence that in vivo hyperoxia induces activation of both Wnt and TGF-β signal transduction pathways in lung and of its near complete prevention by RGZ. Hyperoxia-induced arrest in alveolar development, a hallmark of BPD, along with these molecular changes strongly implicates these proteins in hyperoxia-induced lung injury. Administration of PPARγ agonists may thus be a potential strategy to attenuate hyperoxia-induced lung injury and subsequent BPD. Copyright © 2009 the American Physiological Society.