Arginase is an enzyme that limits substrate l-arginine bioavailability for the production of nitric oxide by the nitric oxide synthases and produces l-ornithine, which is a precursor for collagen formation and tissue remodeling. We studied the pulmonary vascular effects of arginase inhibition in an established model of repeated systemic bleomycin sulfate administration in neonatal rats that results in pulmonary hypertension and lung injury mimicking the characteristics typical of bronchopulmonary dysplasia. We report that arginase expression is increased in the lungs of bleomycin-exposed neonatal rats and that treatment with the arginase inhibitor amino-2-borono-6-hexanoic acid prevented the bleomycin-induced development of pulmonary hypertension and deposition of collagen. Arginase inhibition resulted in increased l-arginine and l-arginine bioavailability and increased pulmonary nitric oxide production. Arginase inhibition also normalized the expression of inducible nitric oxide synthase, and reduced bleomycin-induced nitrative stress while having no effect on bleomycin-induced inflammation. Our data suggest that arginase is a promising target for therapeutic interventions in neonates aimed at preventing lung vascular remodeling and pulmonary hypertension.