Sleep fragmentation, decreased rapid eye movement (REM) sleep time, and REM sleep hypoxemia have been reported in infants with chronic neonatal lung disease (CNLD) in early infancy despite an awake hemoglobin oxygen saturation (SaO2) >93%. Interestingly, higher inspired O2 concentrations have been demonstrated to reduce REM sleep fragmentation in CNLD patients in middle infancy. However, the effect of increased SaO2 on sleep architecture in infants with CNLD near the time of discharge from neonatal intensive care has not been reported. We performed paired overnight polysomnography in a sleep laboratory on 16 infants with CNLD (4 weeks median corrected age) in air or their usual inspired oxygen (SaO2 >93%) and again when receiving 0.25 L/min higher than baseline inspired oxygen via nasal catheters (SaO2 >97%). A control group of seven healthy preterm infants was similarly studied. For CNLD infants on supplemented O2, sleep duration decreased by 15% (422+/-66 min vs. 359+/-89 min; P< 0.005), and sleep efficiency decreased by 7% (73.2+/-10.6% vs. 66.4+/-14.0%; P < 0.005) but percentage of time in REM sleep (REM%) (31.5+/-8.9% vs. 29.8+/-8.6%; P=0.560), REM epoch duration (12.4+/-2.8 min vs. 13.4+/-4.3 min; P=0.420), and REM arousal index (18.6+/-6.5 vs. 18.8+/-7.2; P=0.990) were not significantly affected. Conversely, higher O2 did not alter sleep architecture in the control group. The mean non-REM (NREM) respiratory rate decreased (CNLD: P=0.003; controls: P=0.02), NREM SaO2 increased (P < 0.05), although the mean transcutaneous CO2 was unaltered in both CNLD and control groups. This study confirmed low REM% in CNLD infants in early infancy and demonstrated that a higher SaO2 adversely affected sleep time but did not influence REM sleep duration or arousal frequency. A target SaO2 >93% is, therefore, as efficacious as an SaO2 >97% in optimizing sleep architecture in CNLD infants.