Background: Hyperoxia increases Sonic hedgehog (Shh) expression in neonatal rat lungs. The effect of mesenchymal stem cells (MSCs) on the hedgehog signaling pathway in hyperoxiainduced lung injury is unknown. This study evaluated whether MSCs could inhibit hedgehog signaling and improve established hyperoxia-induced lung injury in newborn rats. Methods: Newborn rats were assigned to room air (RA) or hyperoxia (85% O 2) groups from postnatal day 4e15, and some received intravenous injection of human MSCs (9 Â 10 5 cells) in 90 mL of normal saline (NS) through the tail vein on postnatal day 15. We obtained four study groups as follows: RA þ NS, RA þ MSCs, O 2 þ NS, and O 2 þ MSCs. Pups from each group were sacrificed on postnatal days 15 and 29, and lungs were removed for histological and Western blot analyses. Results: Neonatal hyperoxia on postnatal days 4e15 reduced the body weight, increased the mean linear intercept, and decreased the vascular density of the rats, and these effects were associated with increased Shh and Smoothened (Smo) expression and decreased Patched expression. By contrast, the MSC-treated hyperoxic pups exhibited improved alveolarization, increased vascularization, and decreased Shh and Smo expression on postnatal day 29. Conclusion: Human MSC treatment reversed established hyperoxia-induced lung injury in newborn rats, probably through suppression of the hedgehog pathway.