A cute lung injury syndromes remain common causes of morbidity and mortality in adults and children. Cellular and physiologic mechanisms maintaining pulmonary homeostasis during lung injury remain poorly understood. In the present study, the Stat-3 gene was selectively deleted in respiratory epithelial cells by conditional expression of Cre-recombinase under control of the surfactant protein C gene promoter. Cell-selective deletion of Stat-3 in respiratory epithelial cells did not alter prenatal lung morphogenesis or postnatal lung function. However, exposure of adult Stat-3–deleted mice to 95% oxygen caused a more rapidly progressive lung injury associated with alveolar capillary leak and acute respiratory distress. Epithelial cell injury and inflammatory responses were increased in the Stat-3–deleted mice. Surfactant proteins and lipids were decreased or absent in alveolar lavage material. Intratracheal treatment with exogenous surfactant protein B improved survival and lung histology in Stat-3–deleted mice during hyperoxia. Expression of Stat-3 in respiratory epithelial cells is not required for lung formation, but plays a critical role in maintenance of surfactant homeostasis and lung function during oxygen injury.