Bronchopulmonary dysplasia (BPD) is a pulmonary disorder that causes significant morbidity and mortality in premature infants. BPD is pathologically characterized by inflammation, fibrosis, and mucosal necrosis, which leads to emphysematous coalescence of alveoli. We tested the hypothesis that azithromycin, a macrolide antibiotic, would decrease the severity of lung injury in an animal model of BPD. Sixty-three rat pups were randomly divided equally into control, hyperoxia, and hyperoxia plus azithromycin groups. The hyperoxia groups were exposed to > 95% oxygen from days of life 4 to 14. On day 14, the animals were processed for lung histology and tissue analysis. Lung morphology was assessed by mean linear intercept, a measure of alveolar size, with larger values corresponding to lungs that are more emphysematous. The degree of lung inflammation was assessed by quantifying interleukin-6 (IL-6) from lung homogenate. Fifty pups survived to day 14 (control = 21, hyperoxia = 11, hyperoxia + azithromycin = 18). Mortality was increased in the hyperoxia group versus the control group (p < .0001). Treatment with azithromycin improved survival in animals subjected to hyperoxia (p < .05). Azithromycin significantly decreased lung damage as determined by the mean linear intercept in the hyperoxia groups (p < .001). Finally, azithromycin-treated pups had lower levels of IL-6 in lung homogenate from the hyperoxia groups (p < .05). Azithromycin treatment resulted in improved survival, less emphysematous change, and decreased IL-6 levels in an animal model of BPD.