Significance: Premature and sick neonates are often exposed to high concentrations of oxygen, which results in lung injury and long-term adverse consequences. Nevertheless, neonates are more tolerant to hyperoxia than are adults. This may be, in part, explained by the high lung content of heme oxygenase-1 (HO-1), the rate-limiting enzyme in the degradation of heme and an important stress protein. The abundance of HO-1 dictates its cytoprotective and deleterious effects. Interestingly, in response to hyperoxia, lung HO-1 mRNA is not further up-regulated in neonates, suggesting that lung HO-1 gene expression is tightly regulated so as to optimize cytoprotection when faced with an oxidative stress such as hyperoxia. Recent Advances: In addition to the lack of induction of HO-1 mRNA, neonatal lung HO-1 protein is observed in the nucleus in neonatal mice exposed to hyperoxia but not in adults, which is further evidence for the developmental regulation of HO-1. Nuclear HO-1 had unique properties independent of its enzymatic activity. In addition, there has been increasing evidence that nuclear HO-1 contributes to cellular proliferation and malignant transformation in several human cancers. Critical Issues: Since HO-1 has dual effects in cytoprotection and cellular proliferation, the titration of HO-1 effects is critical to ensure beneficial actions against oxidative stress. Future Directions: Much more has to be understood about the specific roles of HO-1 so as to manipulate its abundance and/or nuclear migration to maximize the therapeutic benefit of this pleiotropic protein in the neonatal lung.