Exposure of immature lungs to hyperoxia for prolonged periods contributes to neonatal lung injury and airway hyperreactivity. We studied the role of disrupted NO-cGMP signaling in impairing the relaxant responses of lung tissue from hyperoxia exposed rat pups. Pups were exposed to 95% O2 or room air for 7 days starting from days 1, 5 or 14. The animals were sacrificed, lungs were removed and 1 mm thick lung parenchymal strips were prepared. Lung parenchymal strips of room air or hyperoxic pups, were preconstricted using bethanechol and then graded electrical field stimulation (EFS) was applied to induce relaxation. EFS induced relaxation of lung parenchymal strips was greater at 7 and 12 days than at 21 days in room air exposed rat pups. Hyperoxic exposure significantly reduced relaxation at 7 and 12 days but not 21 days as compared to room air exposure. Nitric oxide synthase (NOS) blockade with L-NAME diminished relaxant responses in room air but not in hyperoxic pups at 12 days. After incubation with supplemental L-arginine the relaxation response of hyperoxic strips was restored. cGMP, a key mediator of the NO signaling pathway, also decreased in strips from hyperoxic versus room air pups and cGMP levels were restored after incubation with supplemental L-arginine. In addition, arginase activity was significantly increased in hyperoxic strips. These data demonstrate disruption of NO-cGMP signaling in neonatal rat pups exposed to hyperoxia, and show that bioavailability of the substrate L-arginine is implicated in the predisposition of this model to airway hyperreactivity.