Retinoids play an important role in lung development and repair. We showed that retinoic acid (RA) inhibits O(2)-induced fibroblast proliferation in rat lung explants. IGF-1, which enhances the proliferation of human fetal lung fibroblasts and stimulates collagen production during lung injury, has an important role in the lung injury/repair process. Interactions of IGF-1 with its receptor are modulated by IGF-binding proteins IGFBPs. We hypothesized that RA alters IGFBP-2 and -3 in hyperoxia-exposed neonatal lung and alters collagen production. Neonatal rat lungs were cultured in room air or 95% O(2) and 5% CO(2) for 3 d with or without RA. IGFBP-2 and -3 were measured both in culture medium and in lung tissue. Type I collagen and procollagen propeptide were analyzed in the lung tissue. Hyperoxia induced an increase in type I collagen that was significantly inhibited in the presence of RA. IGFBP-2 and IGFBP-3 in the lungs were decreased in hyperoxia but significantly increased in hyperoxia plus RA. In the culture medium, IGFBP-2 and -3 were not increased with hyperoxia but significantly increased in the presence of RA plus hyperoxia. There was no increase in IGFBP-3 RNA transcript after RA treatment in either room air or O(2) exposure. In conclusion, RA modulates the secreted IGFBP-2 and -3 during O(2) exposure and inhibits the increase in collagen that occurs during lung injury. We speculate that RA protects against O(2)-induced neonatal lung injury through modulation of the IGFBPs.