Background: Premature neonates frequently require oxygen supplementation as a therapeutic intervention that, while necessary, also exposes the lung to significant oxidant stress. We hypothesized that hyperoxia has a deleterious effect on alveolar epithelial barrier function rendering the neonatal lung susceptible to injury and/or bronchopulmonary dysplasia (BPD). Materials and Methods: We examined the effects of exposure to 85% oxygen on neonatal rat alveolar barrier function in vitro and in vivo. Whole lung was measured using wet-to-dry weight ratios and bronchoalveolar lavage protein content and cultured primary neonatal alveolar epithelial cells (AECs) were measured using transepithelial electrical resistance (TEER) and paracellular flux measurements. Expression of claudin-family tight junction proteins, E-cadherin and the Snail transcription factor SNAI1 were measured by Q-PCR, immunoblot and confocal immunofluorescence microscopy. Results: Cultured neonatal AECs exposed to 85% oxygen showed impaired barrier function. This oxygen-induced increase in paracellular leak was associated with altered claudin expression, where claudin-3 and -18 were downregulated at both the mRNA and protein level. Claudin-4 and -5 mRNA were also decreased, although protein expression of these claudins was largely maintained. Lung alveolarization and barrier function in vivo were impaired in response to hyperoxia. Oxygen exposure also significantly decreased E-cadherin expression and induced expression of the SNAI1 transcription factor in vivo and in vitro. Conclusions: These data support a model in which hyperoxia has a direct impact on alveolar tight and adherens junctions to impair barrier function. Strategies to antagonize the effects of high oxygen on alveolar junctions may potentially reverse this deleterious effect.