-Supplemental oxygen treatment in preterm infants may cause bronchopulmonary dysplasia (BPD), which is characterized by alveolar simplification and vascular disorganization. Despite type II alveolar epithelial cell (AEC II) damage being reported previously, we found no decrease in the AEC II-specific marker, surfactant protein C (SP-C), in the BPD model in our previous study. We thus speculated that AEC II injury is not a unique mechanism of BPD-related pulmonary epithelial repair dysfunction and that abnormal transdifferentiation can exist. Newborn rats were randomly assigned to model (85% oxygen inhalation) and control groups (room air inhalation). Expressions of AEC I (aquaporin 5, T1␣) and AEC II markers (SP-C, SP-B) were detected at three levels: 1) in intact lung tissue, 2) in AEC II isolated from rats in the two groups, and 3) in AEC II isolated from newborn rats, which were further cultured under either hyperoxic or normoxic conditions. In the model group, increased AEC I was observed at both the tissue and cell level, and markedly increased transdifferentiation was observed by immunofluorescent double staining. Transmission electron microscopy revealed morphological changes in alveolar epithelium such as damaged AECs, a fused air-blood barrier structure, and opened tight junctions in the model group. These findings indicate that transdifferentiation of AECs is not suppressed but rather is increased under hyperoxic treatment by compensation; however, such repair during injury cannot offset pulmonary epithelial air exchange and barrier dysfunction caused by structural damage to AECs. transdifferentiation; alveolar epithelial cells; hyperoxia; bronchopulmonary dysplasia SUPPLEMENTAL OXYGEN TREATMENT, which is often necessary for preterm infants with respiratory failure, has become a major risk factor for bronchopulmonary dysplasia (BPD), one of the most common, serious complications in preterm infants (6,34). BPD is characterized by high morbidity in infants with very low birth weight (BW Ͻ 1,500 g) soon after birth and may induce multiple complications in respiratory and nervous systems during adolescence (4, 6). Despite several decades of research, the underlying pathophysiological foundation of BPD has not been completely clarified.Lung tissue consists of many different cell types, and a developmental disorder of alveolar epithelial cells (AEC) is likely a major cause of BPD (40). The alveolar area accounts for Ն99% of the internal surface area of the lungs (49). Mammals have two types of AECs that maintain normal air exchange function by mutual coordination. Type I AEC (AEC I) cover nearly 96% of alveolar spaces and closely adhere to adjacent capillaries. Such cells are the main epithelial constituents of the air-blood barrier (18, 53) and have air exchange functions. Recent studies have revealed that AEC I can also secrete transport proteins to maintain intrapulmonary fluid and electrolyte balance (9,19,22). Type II AEC (AEC II) are located at the corners of alveoli and are more abundant than AEC I bu...