Bronchopulmonary dysplasia (BPD) poses a significant global health problem. It mainly occurs in preterm infants. It is histopathologically characterized by fewer and larger alveoli and less secondary septa, suggesting an arrested or disordered lung development. To date, the mechanisms that lead to the pathophysiological changes in BPD have still not been totally understood. In embryonic development, histone deacetylase (HDAC) plays an important role by regulating gene transcription. Here, we hypothesize that a decreased HDAC expression and activity, caused by preterm birth or environmental stresses, contribute to a disorder in alveolar development in BPD. To this end, newborn Sprague–Dawley rats subjected to hyperoxia (85% O2) were used to investigate the gene expression and protein activity of HDAC and alveolar development in lungs. Our results showed that hyperoxia exposure led to a suppression of the HDAC1/HDAC2 expression and activity, and the overall HDAC activity, as well as arrest of alveolarization, and an elevated expression of the cytokine-induced neutrophil chemoattractant-1 (CINC-1) in the lungs of newborn rats. However, preservation of HDAC activity by theophylline significantly improved alveolar development and attenuated CINC-1 release, all of which were blocked by a specific HDAC inhibitor, trichostatin A (TSA). TSA alone can disturb the alveolar development in neonatal rats. Our findings indicate that a persistent exposure to hyperoxia leads to a suppressed HDAC activity, which causes disorders in pulmonary development. This effect may be mediated by CINC-1. Attenuation of CINC-1-mediated inflammation by activating HDAC may have a protective effect in BPD. Pediatr Pulmonol. 2012; 47:264–274. © 2011 Wiley Periodicals, Inc.