Background: Bronchopulmonary dysplasia (BPD) is one of the most devastating conditions in premature babies; meanwhile, keratinocyte growth factor-2 (KGF-2) plays a key role in lung development. The aim of this study was to examine the therapeutic effects of recombinant human KGF-2 (rhKGF-2) in a hyperoxia-induced BPD rat model and explore the potential underlying mechanisms. Methods: A total of 75 newborn Sprague-Dawley (SD) rats were assigned to 5 groups, including normoxia control, normoxia+rhKGF2, BPD (no treatment), BPD+saline (NS) and BPD+rhKGF2 groups (n=15/group). For treatment, rats were intratracheally administered rhKGF2 (5 mg/kg) or equal volume of saline, and sacrificed 2 weeks later. Weights and wet-to-dry weight ratio ((W/D), an indicator of lung edema) values of lung specimens were measured. Then, IL-1 beta, IL-6, TNF-alpha, and macrophage inflammatory protein-2 (MIP-2) levels were quantitated by enzyme-linked immunosorbent assay (ELISA) in bronchoalveolar fluid (BALF) samples. Next, lung tissue specimens were assessed by H&E staining, immunohistochemistry (VEGFa and NF-kappa B p65), quantitative real-time reverse transcription polymerase chain reaction (qRT-PCR; surfactant protein C or SPC) and immunoblotting (VEGFa, NF-kappa B p65 and p-p65). Results: In the hyperoxia-induced BPD rat model, rhKGF-2 promoted lung growth and development, and reduced pulmonary edema. Treatment with rhKGF-2 resulted in reduced BALF levels of inflammatory cytokines, increased SPC mRNA levels and VEGF protein expression in the lung, and slightly decreased lung NF-kappa B p65 nuclear expression and phosphorylation. Conclusion: rhKGF-2 alleviates hyperoxia-induced BPD, likely through reduced inflammation and induction of SPC.