At birth, ventilation and oxygenation immediately decrease pulmonary vascular resistance (PVR) and increase pulmonary blood flow (PBF); more gradual changes occur over the next several hours. Nitric oxide, produced by endothelial nitric oxide synthase (eNOS), mediates these gradual changes. To determine how ventilation and oxygenation affect eNOS gene expression, 12 fetal lambs were ventilated for 8 h without changing fetal descending aortic blood gases or pH (rhythmic distension) or with 100% oxygen (O2 ventilation). Vascular pressures and PBF were measured. Total RNA, protein, and tissue sections were prepared from lung tissue for RNase protection assays, Western blotting, and in situ hybridization. O2 ventilation increased PBF and decreased PVR more than rhythmic distension (P < 0.05). Rhythmic distension increased eNOS mRNA expression; O2 ventilation increased eNOS mRNA expression more and increased eNOS protein expression (P < 0.05). To define the mechanisms responsible for these changes, ovine fetal pulmonary arterial endothelial cells were exposed to 1, 21, or 95% O2 or to shear stress. 95% O2 increased eNOS mRNA and protein expression (P < 0.05). Shear stress increased eNOS mRNA and protein expression (P < 0.05). Increased oxygenation but more importantly increased PBF with increased shear stress induce eNOS gene expression and contribute to pulmonary vasodilation after birth.