Surfactant protein-B (SP-B) is a small, hydrophobic peptide that plays a critical role in pulmonary function and surfactant homeostasis. To determine whether SP-B protects mice from oxygen-induced injury, heterozygous SP-B^+/− gene-targeted mice and wild-type SP-B^+/+ littermates were exposed to hyperoxia (95% oxygen for 3 d) or room air. Although specific lung compliance in room air in SP-B^+/− mice was slightly reduced as compared with that in SP-B^+/+ mice, it was reduced more markedly during hyperoxia (46% versus 25% decrease, respectively). The larger decrease in lung compliance in SP-B^+/− mice was associated with increased severity of pulmonary edema, hemorrhage and inflammation, lung permeability and protein leakage into the alveolar space. Hyperoxia increased SP-B messenger RNA (mRNA) and total protein concentrations by 2-fold in SP-B^+/+ and SP-B^+/− mice, but decreased the abundance of SP-B protein in lavage fluid relative to total protein only in SP-B^+/− mice. Hyperoxia increased SP-B expression, but apparently not enough to maintain SP-B function and lung compliance in the presence of increased protein leakage in SP-B^+/− mice. Increased alveolar–capillary leakage and relative deficiency of SP-B may therefore contribute to oxygen-induced pulmonary dysfunction in SP-B^+/− mice. These data support the concept that SP-B plays an important protective role in the lung.