A number of transcriptional pathways regulating fetal lung development are active during repair of the injured lung. We hypothesized that C/EBP, a transcription factor critical for lung maturation, plays a role in protection of the alveolar epithelium following hyperoxic injury of the mature lung. Transgenic Cebp^/ mice, in which Cebp was conditionally deleted from Clara cells and type II cells after birth, were developed. While no pulmonary abnormalities were observed in the Cebp^/ mice (7-8wk old) under normal conditions, the mice were highly susceptible to hyperoxia. Cebp^/ mice died within 4d of exposure to 95% oxygen in association with severe lung inflammation, altered maturation of surfactant protein B and C, decreased surfactant lipid secretion, and abnormal lung mechanics at a time when all control mice survived. mRNA microarray analysis of isolated type II cells at 0h, 2h, and 24h of hyperoxia demonstrated the reduced expression of number of genes regulating surfactant lipid and protein homeostasis, including Srebf, Scap, Lpcat1, Abca3, Sftpb, and Napsa. Genes influencing cell signaling or immune responses were induced in the lungs of Cebp^/ mice. C/EBP was required for the regulation of genes associated with surfactant lipid homeostasis, surfactant protein biosynthesis, processing and transport, defense response to stress, and cell redox homeostasis during exposure to hyperoxia. While C/EBP did not play a critical role in postnatal pulmonary function under normal conditions, C/EBP mediates protection of the lung during acute lung injury induced by hyperoxia.