Neonatal hypoxemic respiratory failure (HRF), a deficiency of oxygenation associated with insufficient ventilation, can occur due to a variety of etiologies. HRF can result when pulmonary vascular resistance (PVR) fails to decrease at birth, leading to persistent pulmonary hypertension of newborn (PPHN), or as a result of various lung disorders including congenital abnormalities such as diaphragmatic hernia, and disorders of transition such as respiratory distress syndrome, transient tachypnea of newborn and perinatal asphyxia. PVR changes throughout fetal life, evident by the dynamic changes in pulmonary blood flow at different gestational ages. Pulmonary vascular transition at birth requires an interplay between multiple vasoactive mediators such as nitric oxide, which can be potentially inactivated by superoxide anions. Superoxide anions have a key role in the pathophysiology of HRF. Oxygen (O2) therapy, used in newborns long before our knowledge of the complex nature of HRF and PPHN, has continued to evolve. Over time has come the discovery that too much O2 can be toxic. Recommendations on the optimal inspired O2 levels to initiate resuscitation in term newborns have ranged from 100% (pre 1998) to the currently recommended use of room air (21%). Questions remain about the most effective levels, particularly in preterm and low birth weight newborns. Attaining the appropriate balance between hypoxemia and hyperoxemia, and targeting treatments to the pathophysiology of HRF in each individual newborn are critical factors in the development of improved therapies to optimize outcomes.