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Chronic lung disease (CLD) affects premature newborns requiring supplemental oxygen and results in impaired lung development and subsequent airway hyperreactivity. We hypothesized that the maintenance of peroxisome proliferator-activated receptor gamma (PPARgamma) signaling is important for normal lung morphogenesis and treatment with PPARgamma agonists could protect against CLD and airway hyperreactivity (AHR) following chronic hyperoxic exposure. This was tested in an established hyperoxic murine model of experimental CLD. Newborn mice and mothers were exposed to room air (RA) or moderate hyperoxia (70% oxygen) for 10 days and fed a standard diet or chow impregnated with the PPARgamma agonist rosiglitazone (ROSI) for the duration of study. Following hyperoxic exposure (HE) animals were returned to RA until postnatal day (P) 13 or P41. The accumulation of ROSI in neonatal and adult tissue was confirmed by mass spectrometry. Analyses of body weight and lung histology were performed on P13 and P41 to localize and quantitate PPARgamma expression, determine alveolar and microvessel density, proliferation and alpha-smooth muscle actin (alpha-SMA) levels as a measure of myofibroblast differentiation. Microarray analyses were conducted on P13 to examine transcriptional changes in whole lung. Pulmonary function and airway responsiveness were analyzed at P55. ROSI treatment during HE preserved septation and vascular density. Key array results revealed ontogeny groups differentially affected by hyperoxia including cell cycle, angiogenesis, matrix, and muscle differentiation/contraction. These results were further confirmed by histological evaluation of myofibroblast and collagen accumulation. Late AHR to methacholine was present in mice following HE and attenuated with ROSI treatment. These findings suggest that rosiglitazone maintains downstream PPARgamma effects and may be beneficial in the prevention of severe CLD with AHR.