SummaryPneumococcal pneumonia causes cytotoxicity in the lung parenchyma but the underlying mechanism involves multiple factors contributing to cell death. Here, we discovered that hydrogen peroxide produced byStreptococcus pneumoniae(Spn-H2O2) plays a pivotal role by oxidizing hemoglobin, leading to its polymerization and subsequent release of labile heme. At physiologically relevant levels, heme selected a population of encapsulated pneumococci. In the absence of capsule and Spn-H2O2, host intracellular heme exhibited toxicity towards pneumococci, thus acting as an antibacterial mechanism. Further investigation revealed that heme-mediated toxicity required the ABC transporter GlnPQ.In vivoexperiments demonstrated that pneumococci release H2O2to cause cytotoxicity in bronchi and alveoli through the non-proteolytic degradation of intracellular proteins such as actin, tubulin and GAPDH. Overall, our findings uncover a mechanism of lung toxicity mediated by oxidative stress that favor the growth of encapsulated pneumococci suggesting a therapeutic potential by targeting oxidative reactions.Graphical abstractHighlightsOxidation of hemoglobin byStreptococcus pneumoniaefacilitates differentiation to encapsulated pneumococciin vivoDifferentiatedS. pneumoniaeproduces capsule and hydrogen peroxide (Spn-H2O2) as defense mechanism against host heme-mediated toxicity.Spn-H2O2-induced lung toxicity causes the oxidation and non-proteolytic degradation of intracellular proteins tubulin, actin, and GAPDH.The ABC transporter GlnPQ is a heme-binding complex that makes Spn susceptible to heme toxicity.