Male sex is considered an independent predictor for the development of bronchopulmonary dysplasia (BPD) after adjusting for other confounders. BPD is characterized by an arrest in lung development with marked impairment of alveolar septation and vascular development. The reasons underlying sexually dimorphic outcomes in premature neonates are not known. In this investigation, we tested the hypothesis that male neonatal mice will be more susceptible to hyperoxic lung injury and will display larger arrest in lung alveolarization. Neonatal male and female mice (C57BL/6) were exposed to hyperoxia [95% FiO₂, postnatal day (PND) 1–5] and euthanized on PND 7 and 21. Extent of alveolarization, pulmonary vascularization, inflammation, and modulation of the NF-κB pathway were determined and compared with room air controls. Macrophage and neutrophil infiltration was significantly increased in hyperoxia-exposed animals but was increased to a larger extent in males compared with females. Lung morphometry showed a higher mean linear intercept (MLI) and a lower radial alveolar count (RAC) and therefore greater arrest in lung development in male mice. This was accompanied by a significant decrease in the expression of markers of angiogenesis (PECAM1 and VEGFR2) in males after hyperoxia exposure compared with females. Interestingly, female mice showed increased activation of the NF-κB pathway in the lungs compared with males. These results support the hypothesis that sex plays a crucial role in hyperoxia-mediated lung injury in this model. Elucidation of the sex-specific molecular mechanisms may aid in the development of novel individualized therapies to prevent/treat BPD.