We noted a marked increase in IFNγ mRNA in newborn (NB) murine lungs after exposure to hyperoxia. We sought to evaluate the role of IFNγ in lung injury in newborns. Using a unique triple-transgenic (TTG), IFNγ-overexpressing, lung-targeted, externally regulatable NB murine model, we describe a lung phenotype of impaired alveolarization, resembling human bronchopulmonary dysplasia (BPD). IFNγ-mediated abnormal lung architecture was associated with increased cell death and the upregulation of cell death pathway mediators caspases 3, 6, 8, and 9, and angiopoietin 2. Moreover, an increase was evident in cathepsins B, H, K, L, and S, and in matrix metalloproteinases (MMPs) 2, 9, 12, and 14. The IFNγ-mediated abnormal lung architecture was found to be MMP9-dependent, as indicated by the rescue of the IFNγ-induced pulmonary phenotype and survival during hyperoxia with a concomitant partial deficiency of MMP9. This result was concomitant with a decrease in caspases 3, 6, 8, and 9 and angiopoietin 2, but an increase in the expression of angiopoietin 1. In addition, NB IFNγ TTG mice exhibited significantly decreased survival during hyperoxia, compared with littermate controls. Furthermore, as evidence of clinical relevance, we show increased concentrations of the downstream targets of IFNγ chemokine (C-X-C motif) ligands (CXCL10 and CXCL11) in baboon and human lungs with BPD. IFNγ and its downstream targets may contribute significantly to the final common pathway of hyperoxia-induced injury in the developing lung and in human BPD.