Cathepsin K (CatK), contributes to the development of chronic lung disease in newborn infants, but the impact of CatK for the lungs may be multifaceted. We have previously demonstrated that low level of CatK is associated with newborn lung injury and CatK deficiency aggravates lung injury in hyperoxia-exposed newborn mice. Thus, we hypothesized that sustained/higher expression of CatK could ameliorate hyperoxia-induced injury and restrain the development of pulmonary fibrosis. We studied the lungs of newborn wild-type (WT) and CatK overexpressing transgenic mice (TG) that were exposed to hyperoxia or room air for 7 or 14 days after birth. Fourfold pulmonary overexpression of CatK did not affect the growth or lung weight in room-air bred TG mice. The distal airspaces in TG mice were, however, enlarged on postnatal days (PN) 7 and 14, the latter together with increased apoptosis, compared with WT controls. Survival rate was normal and no respiratory distress was observed in air-bred TG mice. Hyperoxia inhibited alveolarization and increased collagen accumulation in WT mice. In TG mice, hyperoxia for 1 week did not aggravate the lung injury, and the lung morphology and already enlarged alveoli remained unchanged in TG mice at PN7. Prolonged hyperoxic exposure caused significant lung injury and mortality similarly in both group of mice, and only few mice survived until PN14. In summary, CatK overexpression slightly enlarges distal airways in infant mice, but hyperoxic environment is initially better tolerated when compared to WT mice. These findings suggest multifaceted role for CatK in lung development and newborn lung injury.